Judge Blocks Trump Administration’s Attempt to Cancel $20 Billion Climate Grant Fund

Federal Judge Tanya S. Chutkan has blocked the Trump administration’s attempt to withdraw $14 billion in climate grant funding from Citibank, ruling that the EPA failed to provide sufficient evidence of fraud or follow proper procedures.

Key Takeaways

A federal judge issued a temporary restraining order preventing the EPA from withdrawing $14 billion in climate grants allocated during the Biden administration.
EPA Administrator Lee Zeldin had attempted to freeze the funds, citing concerns about fraud and political favoritism in the recipient selection process.
Judge Chutkan ruled the EPA lacked “credible evidence” and failed to follow proper procedures in attempting to terminate the grants.
While the ruling blocks the EPA from terminating grants, it does not allow recipients to withdraw funds, keeping the money effectively frozen.
The case highlights the legal challenges faced by the Trump administration in reversing climate policies established by the previous administration.

Court Halts EPA’s Climate Fund Termination

The Environmental Protection Agency’s attempt to withdraw $14 billion in climate grant funding has been temporarily blocked by U.S. District Judge Tanya S. Chutkan. The judge determined that the EPA under Administrator Lee Zeldin failed to provide sufficient evidence of fraud or mismanagement that would justify terminating the grants. The ruling prevents the EPA from proceeding with its planned termination of the Greenhouse Gas Reduction Fund and stops Citibank from transferring the allocated money back to the federal government.

The $20 billion climate fund was established during the Biden administration to invest in clean-energy technologies, particularly targeting low-income communities. It distributed grants to eight organizations, including Climate United, which was set to receive nearly $7 billion, and Power Forward Communities, which received $2 billion despite reportedly having minimal funds at the time of the grant allocation. The Department of Government Efficiency (DOGE) had identified these grants for termination, leading to legal action from the recipients.

Lack of “Credible Evidence” Cited in Ruling

In her ruling, Judge Chutkan emphasized that the EPA had not presented sufficient justification for its actions. She determined that the agency’s claims of fraud and mismanagement were vague and unsupported by concrete evidence. The judge also noted that the EPA had failed to follow proper procedures required by federal grant laws and regulations, which protect grantees from arbitrary termination of awarded funds. This procedural failure formed a key basis for her decision to issue the temporary restraining order.

The ruling has been welcomed by grant recipients, with Beth Bafford from Climate United describing it as a “strong step in the right direction.” Climate United had previously paused staff furloughs after receiving temporary emergency funding from a donor. The organization now plans to file for an injunction to fully release the funds, with a hearing expected in the coming weeks. Despite this temporary victory for the grant recipients, the funds remain frozen pending further legal proceedings.

Administration Vows to Continue Fight

EPA Administrator Lee Zeldin has expressed determination to continue pursuing the termination of these grants. Following the court ruling, Zeldin stated, “I will not rest until these hard-earned taxpayer dollars are returned to the U.S. Treasury.”

The controversy surrounding the grants includes allegations that some recipients, particularly Power Forward Communities, had connections to political figures, including organizations linked to Stacey Abrams. These claims formed part of the EPA’s justification for attempting to terminate the funding. Critics of the Greenhouse Gas Reduction Fund have characterized it as politically motivated spending disguised as climate action, while supporters maintain that the program represents essential investment in addressing climate change and supporting disadvantaged communities.

This case illustrates the broader challenges faced by the Trump administration in reversing policies established by the previous administration. Once federal grant money has been allocated and awarded through proper channels, reclaiming those funds becomes legally complex, requiring substantial evidence and adherence to established procedures. The outcome of this legal battle will likely have significant implications for the administration’s ability to redirect climate funding and reshape environmental policy priorities.