Legal Ruling Blocks Trump Administration’s Efforts to Terminate $20 Billion EPA Climate Grant Fund

A federal judge has blocked the Trump administration’s attempts to claw back $20 billion in climate grants, setting the stage for a prolonged legal battle over Biden-era environmental funding.

Key Takeaways

U.S. District Judge Tanya S. Chutkan issued a temporary restraining order preventing the EPA from withdrawing $14 billion in climate grant funding from Citibank.
The judge ruled the EPA lacked “credible evidence” of fraud and failed to follow proper procedures in attempting to block the grants.
EPA Administrator Lee Zeldin had expressed concerns about potential fraud and political favoritism in the selection of grant recipients.
The ruling prevents fund termination but does not allow grant recipients to withdraw money from their accounts.
The case highlights the challenges of reversing a previous administration’s policies and the complexity of reclaiming awarded grant money.

Judge Halts Trump EPA’s Fund Withdrawal Efforts

U.S. District Judge Tanya S. Chutkan delivered a significant setback to the Trump administration by issuing a temporary restraining order that blocks the Environmental Protection Agency from withdrawing $14 billion in climate grant funding from Citibank. The ruling prevents the EPA from proceeding with grant termination and prohibits Citibank from transferring funds back to the federal government. However, it’s important to note that while the funds remain frozen, grant recipients still cannot access or withdraw money from their accounts.

The legal challenge centers around the Greenhouse Gas Reduction Fund, a $20 billion program created during the Biden administration aimed at investing in clean-energy technologies, particularly in low-income areas. The fund had already distributed grants to eight organizations before the Trump administration attempted to terminate it. EPA Administrator Lee Zeldin had previously suggested the program was vulnerable to fraud and political favoritism in recipient selection, but Judge Chutkan determined these claims lacked sufficient evidence.

Some notes on Judge Chutkan’s temporary restraining order yesterday in 3 cases spurred by the Trump Adm’s hunt for criminality in Congress’s Greenhouse Gas Reduction Fund—a hunt that has already led to a top federal prosecutor's resignation in protest. …
1/11 pic.twitter.com/T5qB6BwnFH

— Roger Parloff (@rparloff) March 19, 2025

Controversies Surrounding Grant Recipients

Among the organizations receiving significant funding was Power Forward Communities, which obtained $2 billion despite reportedly having minimal funds at the time of the grant award. This organization has connections to groups associated with Stacey Abrams, raising questions about potential political considerations in the grant allocation process. Similarly, Climate United, a nonprofit set to receive nearly $7 billion, had recently been forced to pause staff furloughs after receiving a temporary emergency grant from an unnamed donor.

The Department of Government Efficiency (DOGE), established under the Trump administration, had attempted to terminate the fund, leading to the lawsuit from grant recipients that resulted in this court ruling. The legal proceedings reflect broader conflicts between the Trump administration’s priorities and its predecessor’s environmental policy initiatives, with taxpayer dollars caught in the middle of competing visions for government spending and environmental action.

Legal Rationale and Future Implications

Judge Chutkan’s ruling emphasized that the government must follow established grant laws and regulations, even when a new administration seeks to reverse course on policy initiatives. In her decision, she noted that the EPA had failed to provide “credible evidence” to justify its actions and had not followed proper procedures in attempting to block the grants. This ruling highlights the significant constraints facing administrations seeking to unwind their predecessors’ funding decisions once money has been formally allocated.

Climate United plans to file for an injunction to release the funds, with a hearing expected in the coming weeks. Meanwhile, EPA Administrator Zeldin has maintained that the funds remain frozen and expressed his intention to continue pursuing their return to the U.S. Treasury. The case illustrates the significant procedural and legal hurdles involved in reversing major funding decisions across administrations, particularly when contracts have already been signed and obligations established. The ultimate resolution will likely set important precedents for future transitions of power and environmental policy implementation.