A federal judge on Tuesday ordered the Trump administration to halt the cancellation of $14 billion in grants to climate projects. The grants, which were made by the Biden administration, were under the Greenhouse Gas Reduction Fund, or the “green bank,” established by the 2022 Inflation Reduction Act. The program was intended to finance clean energy and climate projects.
U.S. District Judge Tonya Chutkan’s decision prevents the Environmental Protection Agency (EPA) from terminating the grant program, which is worth $20 billion. The judge also ordered Citibank, where the funds are being kept in trust for the EPA, not to release the money to the government or anyone else.
The grantees had been charged with fraud, mismanagement, and self-dealing by EPA Administrator Lee Zeldin, which led to the grants being frozen. Judge Chutkan ruled that the accusations by Zeldin were not supported by sufficient evidence since the EPA had not adequately explained why the termination of grants was a reasonable option at this point in the review process.
The lawsuit was filed by the Climate United Fund and two other groups, the Coalition for Green Capital and Power Forward Communities, which had received the funds under the Greenhouse Gas Reduction Fund. The groups argued that the freeze not only prevented them from funding new climate projects but also exposed them to job losses. They vehemently denied any embezzlement of the funds.
In her decision, Judge Chutkan preserved the status quo and allowed the case to proceed, but she did not immediately order Citibank to unblock the funds. The groups indicated that the freeze is impairing their ability to make critical investments in clean energy and manufacturing jobs around the country.
The grants were allocated as follows: Climate United Fund received nearly $7 billion, the Coalition for Green Capital received $5 billion, and Power Forward Communities received $2 billion. The program was roundly criticized by Republicans, who unanimously voted against it, labeling it an unaccountable “slush fund.”
Beth Bafford, CEO of Climate United Fund, welcomed the judge’s ruling as a positive one, looking for a long-term solution that will allow the groups to proceed with their projects. Zeldin, however, vowed he would continue with efforts to have the funds returned to the U.S. Treasury, condemning the process of distributing the grants for bypassing proper oversight.
