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

EPA website through magnifying glass showing Environmental Topics

A federal judge has temporarily blocked the Trump administration’s efforts to terminate a $20 billion climate grant fund, questioning the EPA’s claims of fraud and mismanagement in the Biden-era program.

Quick Takes

U.S. District Judge Tanya Chutkan issued a temporary restraining order preventing the EPA from withdrawing $14 billion in climate funding from Citibank.
EPA Administrator Lee Zeldin had attempted to terminate the grants, citing vulnerability to fraud and political favoritism.
The judge ruled the EPA lacked “credible evidence” and failed to follow proper procedures in their attempt to claw back the funds.
Climate United, set to receive nearly $7 billion, and other recipients cannot yet access their funds but are pursuing further legal action.
The case highlights the legal challenges facing the Trump administration as it attempts to dismantle previous climate initiatives.

Judge Challenges EPA’s Evidence for Fund Termination

U.S. District Judge Tanya S. Chutkan has issued a temporary restraining order blocking the Environmental Protection Agency from withdrawing $14 billion in climate grant funding from Citibank. The ruling prevents the EPA from proceeding with its planned termination of grants allocated through the Greenhouse Gas Reduction Fund, a $20 billion climate initiative established during the Biden administration. The decision also stops Citibank from transferring the funds back to the federal government, effectively freezing the situation while the case proceeds through the courts.

The judge specifically cited the EPA’s lack of “credible evidence” and failure to follow proper regulatory procedures in their attempt to block the grants. While the restraining order prevents the EPA’s immediate actions, it also does not allow grant recipients to withdraw money from their accounts, leaving billions in climate funding in limbo. The ruling marks a significant setback for EPA Administrator Lee Zeldin, who had suggested the fund was vulnerable to fraud and showed political favoritism in the selection of recipients.

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

Controversial Recipients and Political Connections

The fund distribution has sparked controversy due to the nature of some of the organizations receiving substantial grants. Power Forward Communities, which received $2 billion, reportedly had minimal funds at the time of the grant award and has connections to organizations linked to Stacey Abrams. Similarly, Climate United, a nonprofit set to receive nearly $7 billion, paused staff furloughs after receiving a temporary emergency grant from a donor following the initial fund freeze by the EPA.

The Greenhouse Gas Reduction Fund was designed to invest in clean-energy technologies, with a particular focus on low-income areas. In total, eight groups were selected to receive portions of the $20 billion. The Trump administration’s Department of Government Efficiency (DOGE) attempted to terminate the fund completely, which prompted the lawsuit from grant recipients that led to the current ruling. Climate United has announced plans to file for an injunction to release the funds, with a hearing expected in the coming weeks.

Legal Standards and Administration Transition Challenges

Judge Chutkan’s ruling highlighted the necessity for the government to follow established grant laws and regulations, even when transitioning between administrations with different policy priorities. The EPA’s claims of mismanagement and fraud were deemed too vague by the court, which demanded more specific evidence before allowing such a significant financial intervention. This case demonstrates the substantial challenges a new administration faces when attempting to reverse policies and funding decisions made by its predecessor.

The legal battle underscores a fundamental tension in American governance and the difficulty of balancing policy consistency with political change after elections. The complexity of reclaiming already awarded grant money presents particular challenges, as recipients have legal protections once funding has been formally allocated. The court’s demand for substantial evidence before allowing grant termination establishes a high bar for the Trump administration as it seeks to reshape federal climate policy and funding priorities in the months ahead.