Judge blocks EPA effort to cancel billions in climate grants

David Jordan, CQ-Roll Call on Mar 19, 2025

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WASHINGTON — A federal judge late Tuesday blocked the EPA from canceling Biden administration climate grants issued from a $20 billion program, finding that the Trump administration did not provide evidence of waste and fraud.

The case concerns the Greenhouse Gas Reduction Fund, established by the 2022 Democratic climate reconciliation law. After the Biden administration selected the grant recipients, it placed the funds in Citibank accounts, from which recipients would draw down over several years as projects are completed.

The total pledged for green projects through the fund was $27 billion, with $7 billion going to a community solar program, and the remaining $20 billion — the funds at issue in this case — providing capital for green projects.

The agency froze the green project funding in February. EPA Administrator Lee Zeldin then canceled the grants on March 11, alleging “program integrity, objections to the award process, programmatic fraud, waste and abuse and misalignment with the agency’s priorities.”

U.S. District Judge Tanya S. Chutkan of the U.S. District Court in Washington, D.C., issued a temporary restraining order requiring that Citibank maintain the grant funds in the plaintiffs’ accounts.

Chutkan said that while the government expressed concerns over the absence of adequate oversight and programmatic fraud, waste and abuse, it did not offer evidence for these claims.

“When the court asked EPA to proffer evidence justifying its decision given the terms of the agreement, its only response was to refer to the termination letter, which gave no legal justification for the termination,” Chutkan, an appointee of President Barack Obama, said in an accompanying memorandum.

The case was brought by three grant recipients: Climate United, which was awarded just under $7 billion; the Coalition for Green Capital, awarded $5 billion; and Power Forward Communities, awarded $2 billion.

Chutkan said that these three grant recipients had demonstrated monetary and non-monetary potential harm, including difficulty monitoring loans that have already been disbursed and difficulty paying invoices for work already completed.

When he announced the cancellation of the grants, Zeldin cited multiple ongoing investigations, including a referral to the Justice Department and the EPA inspector general. However, Chutkan said that was insufficient cause to cancel the grants.

“To be sure, agencies can decide to re-evaluate their programs, or they may decide to end agreements or federal awards. But those decisions must be made lawfully and in accordance with established procedures and relevant rules and regulations,” Chutkan said, adding this must comply with the Administrative Procedure Act.

Zeldin said in a post on X after the ruling that he “will not rest until these hard-earned taxpayer dollars are returned to the U.S. Treasury.”