A federal judge appointed during the Obama administration has issued a temporary restraining order preventing the Environmental Protection Agency (EPA) from canceling billions in climate-related grants awarded to three environmental organizations.
U.S. District Judge Tanya Chutkan blocked the EPA’s attempt to terminate grants given to Climate United, Coalition for Green Capital, and Power Forward Communities, while also preventing Citibank from returning the funds to the government. The grants, totaling nearly $14 billion, were part of a larger $20 billion climate funding initiative established through the Inflation Reduction Act.
The EPA had sought to terminate the grants citing ongoing
investigations into alleged “programmatic waste, fraud, and abuse and conflict of interest.” However, Judge Chutkan ruled that the agency failed to provide adequate evidence or specific details about these investigations, rendering the termination decision “arbitrary and capricious.”
In her 23-page ruling, Chutkan emphasized that the plaintiffs would suffer immediate harm if their funding was withdrawn, as they rely on these grants for essential operations including staff salaries, rent payments, and project funding. The organizations have no alternative funding sources or cash reserves to maintain their operations.
The grants in question were substantial, with Climate United receiving $6.97 billion, Coalition for Green Capital awarded $5 billion, and Power Forward Communities granted $2 billion. These allocations were part of the Biden administration’s broader initiative to combat pollution through various environmental projects.
The three nonprofits initiated legal action on March 8 following Citibank’s withholding of funds and the EPA’s grant termination. Climate United’s CEO Beth Bafford welcomed the court’s decision, describing it as “a strong step in the right direction” and expressed commitment to pursuing long-term solutions for energy savings and job creation across American communities.
EPA Administrator Lee Zeldin, however, strongly criticized the original grant allocation, arguing that the previous administration had awarded the funds to “politically connected” organizations in a way that intentionally limited EPA oversight. Zeldin publicly committed to recovering the funds, stating his determination to ensure taxpayer money serves the EPA’s core mission of environmental and health protection.
In February, Zeldin had announced the EPA’s decision to rescind the grants, citing concerns about insufficient oversight and transparency. He particularly criticized the unprecedented nature of the funding structure, which allowed the recipient organizations to distribute funds to other groups with reduced oversight requirements.
In their legal filing, Climate United requested the court to enforce Citibank’s contractual obligations and declare the EPA’s grant termination as a violation of the Administrative Procedure Act. Bafford emphasized the economic rather than political nature of the program, highlighting its intended purpose of providing financial relief to Americans struggling with basic expenses.
The temporary restraining order represents a significant setback to the EPA’s efforts to reclaim the climate funding, while environmental groups view it as a crucial victory in maintaining their operational capacity and ability to pursue clean energy initiatives. The case highlights ongoing tensions between environmental protection goals and governmental oversight concerns in the implementation of
climate-related funding programs.