We present an overview of the risks that underground thermal energy storage (UTES) can impose on the groundwater system, drinking water production, and the subsurface environment in general. We describe existing policy and licensing arrangements for UTES in the Netherlands, as well as the capability of the current and future Dutch policy and legal framework to minimize or mitigate risks from UTES on groundwater resources. A survey at the European Union member state level indicates that regulation and research on the potential impacts of UTES on groundwater resources and the subsurface environment often lag behind the technological development of and ever-growing demand for this renewable energy source. The lack of a clear and scientifically underpinned risk management strategy implies that potentially unwanted risks might be taken at vulnerable locations such as near well fields used for drinking water production, whereas at other sites, the application of UTES is avoided without proper reasons. This means that the sustainability of UTES as a form of renewable energy is currently not fully understood, and the technology may be compromising the natural resilience of the subsurface environment. We recognize three main issues that should be addressed to secure sustainable application of UTES: Scientific research is required to further elucidate the impacts of UTES on groundwater; cross-sectoral subsurface planning is required to minimize negative conflicts between UTES and other subsurface interests; and EU-wide guidelines and standards are required for quality assurance and control when installing UTES systems.