As European cities race toward climate neutrality, innovative technologies, bold city strategies and new policies are supporting geothermal energy as a clean, scalable, local and independent solution for district heating.
Cities produce more than 70% of global CO2 emissions. The world cannot decarbonize without addressing the challenge of urban sustainability.
In response, the EU has embarked on an ambitious mission to establish 100 climate neutral and smart cities by 2030, many of which have committed to cutting carbon emissions by 55%. One major challenge to urban decarbonization is heating (and cooling) our cities. Heating alone contributes as much as 40% of the world’s energy-related CO2 emissions. On top of that, cities are responsible for around 70% of global CO2 emissions. That means that city-based district heating cannot be overlooked.
Shifting towards cleaner, renewable and sustainable heating systems is an incredibly promising avenue for change. Vienna is aiming to become climate-neutral by 2040 according to its Climate Law which has been passed earlier in 2025. The city is therefore aiming to use 100% renewable energy sources for heating and cooling by 2040, a central tenet of its Heating Plan 2040. passed. Munich, too, has a similar goal to achieve a carbon-neutral heating supply by 2040.
But where can the renewable energy to power these heating systems come from? One answer lies right under our feet.
Harnessing geothermal energy for district heating
District heating uses a central source to heat water (or another safe fluid) and distributes it through insulated pipes to multiple buildings. This replaces individual gas or oil boilers and enables a centralized control of emissions.
Traditionally, district heating systems have been powered by gas or coal, but geothermal energy offers a renewable alternative.
Conventional hydrothermal systems bring hot water or steam trapped in porous rock deep beneath the earth up to the surface. It is then directly used for heating, or converted into electricity through turbines.
Other systems use convection, the transfer of heat through different fluids, which involves the production of brine from a subsurface water aquifer.
Innovative advances are pushing geothermal heating technology even further. For example, OMV-backed Eavor-Loop™ technology is a closed loop system, which eliminates the reliance on natural reservoirs. Instead, it connects two vertical wells with horizontal branches through hot rock, creating a radiator effect.
Challenges and complexity
Despite its potential, geothermal heating faces hurdles. High upfront costs, long exploration and drilling timelines, and heat loss through distribution mean that it’s most viable as a local energy source.
Another challenge is the public concerns that geothermal operations might trigger earthquakes or other seismic activity.
However, there are now a number of innovative ways any potential risk can be identified and mitigated. At OMV, we are using AI and other emerging technologies such as virtual reality and digitally connected devices across our low-carbon energy solutions. These technologies help to model reservoirs, determine drilling locations, optimize the drilling process and perform predictive maintenance on the systems.
Technological advances and the steep learning curve that comes with closed-loop geothermal projects will all help reduce drilling time and infrastructure costs.
Lessons from Germany’s geothermal successes
Geothermal energy is becoming a valuable part of the decarbonisation toolkit across Europe. Germany is helping to lead the way with Munich working towards a fully renewable district heating system by 2040. This is set to be powered by one of Europe’s largest geothermal networks. Unterhaching, south of Munich, is one of the first large-scale geothermal systems in Germany.
These projects in Vienna and Munich offer a glimpse into the low-carbon, scalable, community-integrated future of geothermal district heating. With the right support and investment, geothermal energy is poised to play a significant role in decarbonizing our cities, and contributing to Europe’s net-zero future.
A low-carbon future for cities
Backed by the Council’s call for promoting geothermal energy the European Commission plans to come up with measures aiming at accelerating the deployment of the technology.
In parallel to these developments on EU level, Germany has started discussions on a Geothermal Acceleration Act in order to streamline permitting processes and cutting red tape.
With the right regulatory framework, technology, and investment, geothermal energy can play a key part in Europe’s urban energy transition. By combining geothermal with other clean heating options, cities can move toward truly climate-neutral, resilient, and energy-efficient urban environments.