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

A federal judge has blocked the Trump administration’s attempts to rescind $20 billion in EPA climate grants, creating a significant legal roadblock for the new administration’s environmental policy reversal efforts.

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.
EPA Administrator Lee Zeldin’s claims of fraud and mismanagement in the grant programs were deemed insufficient by the court.
The ruling freezes the status quo – neither allowing the EPA to terminate grants nor permitting recipients to withdraw funds.
The case highlights the difficulties faced by new administrations when attempting to reverse their predecessors’ major policy initiatives.
The disputed Greenhouse Gas Reduction Fund was designed to invest in clean-energy technologies, particularly in low-income communities.

Judicial Intervention Halts EPA’s Grant Termination

U.S. District Judge Tanya S. Chutkan delivered a significant setback to the Trump administration’s environmental agenda by issuing a temporary restraining order that blocks the Environmental Protection Agency from withdrawing $14 billion in climate grant funding. The ruling prevents the EPA from proceeding with grant termination and prohibits Citibank from transferring funds back to the federal government. The decision came after EPA Administrator Lee Zeldin attempted to cancel the grants, citing concerns about vulnerability to fraud and political favoritism in the selection of recipients.

The judge determined that the EPA failed to provide “credible evidence” of wrongdoing and did not follow proper procedures in its attempt to block the grants. This temporary ruling maintains the status quo while further legal proceedings unfold, but importantly, it does not allow grant recipients to withdraw money from their accounts either. The case represents a complex legal battleground where administrative procedure, environmental policy, and political transitions collide.

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 Grant Recipients Under Scrutiny

The Greenhouse Gas Reduction Fund, established during the Biden administration, distributed $20 billion to eight organizations tasked with investing in clean-energy technologies, particularly in underserved communities. Among the recipients was Power Forward Communities, which received $2 billion despite reportedly having minimal funds at the time of the grant award. This organization has drawn particular attention due to its alleged connections to political figures, including organizations linked to Stacey Abrams, raising questions about the grant selection process.

Climate United, a nonprofit organization set to receive nearly $7 billion from the fund, had begun furloughing staff when the grants were frozen but has since received a temporary emergency grant from an unnamed donor. The organization plans to file for an injunction to release the funds, with a hearing expected in the coming weeks. The Department of Government Efficiency (DOGE) had initially championed the termination of the fund, setting the stage for the current legal confrontation.

Legal and Administrative Challenges in Policy Reversal

Judge Chutkan’s ruling highlighted the fundamental requirement for government agencies to adhere to established grant laws and regulations, even when attempting to reverse previous administrations’ policies. The court found that the EPA’s accusations of mismanagement and fraud were too vague and lacked substantiating evidence. This case illustrates the significant hurdles new administrations face when attempting to unwind their predecessors’ major initiatives, particularly when those initiatives involve substantial funding commitments and legally binding grant agreements.

The clash represents a broader conflict between the Trump administration’s environmental priorities and those of the previous administration. EPA Administrator Zeldin has maintained that despite the court ruling, the funds remain frozen, and he intends to pursue all available legal avenues to return the money to the U.S. Treasury. The outcome of this case could establish important precedents for how effectively incoming administrations can redirect or cancel funding priorities established by their predecessors, with implications extending far beyond environmental policy.