Equinor’s 2025 Geothermal Strategy: Cashing in on Earth’s Heat and Lithium

Industry Adoption: How Equinor is Shifting from Broad Exploration to a Targeted Geothermal Lithium Strategy

Between 2021 and 2024, Equinor’s geothermal strategy was one of cautious exploration, primarily driven by its venture capital arm. The Norwegian energy major placed calculated bets on next-generation geothermal technologies, using strategic investments to gain a foothold without over-committing capital. A key move was the November 2021 investment in Lithium de France, signaling an early interest in combining geothermal energy with Direct Lithium Extraction (DLE). This period was defined by leveraging its oil and gas expertise as a transferable skill, partnering with specialists like Standard Lithium in the U.S. and participating in research initiatives like the SINTEF-led FLXenabler project. The approach was to learn and de-risk entry into a nascent market by investing in companies with promising technology rather than building large-scale projects outright.

The period from January 2025 to today marks a significant inflection point. Despite announcing a 50% cut to its overall renewables investment in February 2025, Equinor has sharpened, not abandoned, its geothermal focus. The strategy has crystalized around the high-value synergy of geothermal energy and critical minerals. This is evidenced by its participation in a €40 million funding round for Lithium de France in September 2025, which solidified its stake at 24.40% and aims to push the project to a pre-industrial phase. Concurrently, its U.S. joint venture with Standard Lithium, Smackover Lithium, finalized a $225 million grant from the U.S. Department of Energy. This strategic narrowing indicates that while broad renewables take a backseat, projects offering dual revenue streams (baseload power and battery minerals) and a direct application of Equinor’s core subsurface competencies are being prioritized and accelerated. The company is moving from passive venture investing to active project development through its partnerships.

Table: Equinor’s Geothermal and Related Low-Carbon Investments (2021-2025)

Table: Equinor’s Strategic Geothermal Partnerships (2021-2025)

Geography: Equinor’s Transatlantic Geothermal Lithium Ambitions

Between 2021 and 2024, Equinor’s geothermal activities were geographically concentrated in Europe, anchored by its initial venture investment in France’s Lithium de France. This move targeted the unique geology of the Alsace region in the Rhine Graben, known for its geothermal potential. The strategy took a significant transatlantic turn in May 2024 with the partnership with Standard Lithium. This expanded Equinor’s geographical footprint to North America, specifically targeting the Smackover Formation in Arkansas and Texas, another geological area rich in lithium-bearing brines. This period established two distinct but strategically similar beachheads on both continents.

From 2025 onwards, the focus has shifted from establishing presence to deepening engagement in these chosen regions. In Europe, the September 2025 funding round for Lithium de France signals a commitment to move the French project toward commercial reality, aiming to build out a domestic European lithium supply chain. Simultaneously in the U.S., the finalization of the $225 million DOE grant in January 2025 for the Smackover Lithium joint venture provides powerful government validation and financial de-risking for its American ambitions. The geographic strategy is now clear: target specific, resource-rich geological formations in politically stable regions (EU and U.S.) where integrated geothermal-lithium projects are most viable, rather than pursuing a scattered global approach.

Technology Maturity: Equinor’s Path from Venture Bets to Pre-Commercial Scaling

From 2021 to 2024, Equinor’s technology focus was on scouting and investing in emerging geothermal technologies. The company placed bets on next-generation concepts like Enhanced Geothermal Systems (EGS) and Advanced Geothermal Systems (AGS), but its most concrete actions were in Direct Lithium Extraction (DLE). The initial investment in Lithium de France (2021) and the partnership with Standard Lithium (2024) were endorsements of DLE technology at the pilot and demonstration stage. Standard Lithium’s successful operation of an onsite DLE pilot plant in Arkansas served as a critical validation point, proving the technology’s potential and likely influencing Equinor’s decision to invest heavily. This period was about identifying and vetting promising technologies with the potential to create dual-revenue business models.

The period from 2025 to today demonstrates a clear acceleration in technology maturation. The focus has shifted from piloting to scaling. The €40 million funding for Lithium de France is explicitly to advance its DLE project to the “pre-industrial phase,” moving it beyond the lab and pilot scale toward a commercially viable operation. In the U.S., securing the DOE grant moves the Smackover project from a partnership agreement to a funded development track with a commercial production target of 2028. While high-risk, frontier R&D continues through partnerships like the Iceland Deep Drilling Project exploring supercritical geothermal, Equinor’s capital is now flowing toward technologies that have successfully passed key pilot-stage gates and are on a clear path to commercialization.

Table: SWOT Analysis of Equinor’s Geothermal Strategy (2021-2025)

Forward-Looking Insights and Summary

Equinor’s geothermal strategy has evolved into a disciplined, synergistic play that hedges its energy transition. By concentrating on the intersection of geothermal energy and lithium extraction, the company is creating a business model that leverages its core competencies while tapping into the immense growth of the battery materials market. The most recent data from 2025 confirms this is no longer a scattered R&D effort but a focused, transatlantic execution plan.

Looking ahead, the market should watch for two critical signals. The first is the Final Investment Decision (FID) for the Smackover Lithium joint venture in the U.S. A positive FID would represent the most significant milestone to date, triggering major capital deployment and moving Equinor from an investor to a commercial producer of lithium. The second is the successful transition of the Lithium de France project from its pre-industrial phase to a full-scale commercial plant. This would validate the DLE model in a European context. While the recent cut in renewables spending indicates geothermal is not yet a replacement for oil and gas, its strategic value is clearly rising. Equinor’s success will depend on its partners delivering on technology and cost, proving that this geothermal-lithium nexus can compete for capital and deliver returns on par with the company’s established energy assets.

Understanding these strategic shifts is crucial for anyone navigating the energy transition. To track these developments and analyze the competitive landscape for Equinor and other key players in geothermal, carbon capture, and hydrogen, forward-thinking organizations use dedicated market intelligence platforms. Request a demo of Enki today to see how our data and analytics can empower your strategic decisions.

Frequently Asked Questions

Why is Equinor focusing on combining geothermal energy with lithium extraction?
Equinor is focusing on this combination to create a dual-revenue business model. This strategy allows the company to generate baseload geothermal power while simultaneously extracting high-value lithium from the same geothermal brines using Direct Lithium Extraction (DLE). This approach leverages Equinor’s core subsurface expertise and taps into the growing market for battery minerals.

Did Equinor abandon its geothermal plans after cutting its renewables budget in 2025?
No, Equinor has not abandoned its geothermal plans. Despite announcing a 50% cut to its overall renewables investment in February 2025, the company has sharpened its focus. It is prioritizing and accelerating specific geothermal-lithium projects that align with its core competencies and offer attractive dual-revenue streams, such as its partnerships with Standard Lithium and Lithium de France.

How has Equinor’s geothermal strategy changed between 2021 and 2025?
The strategy has evolved from cautious exploration to focused execution. From 2021 to 2024, Equinor used its venture capital arm to make small, strategic investments to learn about the market. Since 2025, it has shifted to active project development, increasing its stake in key partnerships and advancing projects from pilot stages toward pre-commercial and commercial reality.

Where are Equinor’s main geothermal-lithium projects located?
Equinor is pursuing a targeted transatlantic strategy with two main projects. In the United States, it has a joint venture with Standard Lithium (Smackover Lithium) to develop projects in the Smackover Formation in Arkansas. In Europe, it is a major partner in the Lithium de France project, which is focused on the Alsace region in France.

What is the biggest challenge facing Equinor’s geothermal strategy?
According to the SWOT analysis, the primary threat has shifted from technological risk to economic competitiveness. While DLE technology is being validated at the pilot scale, the main challenge now is ensuring the overall project economics (including the Levelized Cost of Energy) can compete for capital against Equinor’s established and highly profitable oil, gas, and offshore wind assets.