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

A federal judge has blocked the Trump administration’s attempt to claw back $20 billion in climate grant funding, leaving both sides locked in a legal standoff as accusations of fraud and mismanagement clash with procedural requirements.

Quick Takes

U.S. District Judge Tanya Chutkan issued a temporary restraining order preventing the EPA from withdrawing $14 billion in climate grants from Citibank.
EPA Administrator Lee Zeldin had attempted to freeze the funds citing concerns about fraud and political favoritism in the selection process.
The judge ruled the EPA lacked “credible evidence” and failed to follow proper procedures for terminating the grants.
Among the controversial recipients is Power Forward Communities, which received $2 billion despite having minimal prior funds and connections to Stacey Abrams.
While the ruling blocks fund withdrawal, grant recipients still cannot access the money while the legal battle continues.

Judge Halts Trump EPA’s Climate Fund Freeze

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 grant termination and prohibits Citibank from transferring the funds back to the federal government. The decision represents a significant setback for the Trump administration’s Department of Government Efficiency (DOGE), which had attempted to terminate the Greenhouse Gas Reduction Fund established during the Biden administration.

The $20 billion climate grant program was designed to invest in clean-energy technologies, particularly in low-income areas, by distributing funds to eight organizations. EPA Administrator Lee Zeldin had halted the program, citing concerns over fraud and political favoritism in the selection of grant recipients. However, Judge Chutkan ruled that the EPA failed to provide sufficient evidence of wrongdoing and did not follow proper procedures required by grant laws and regulations.

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 Funding Recipients Under Scrutiny

One of the most contentious aspects of the climate fund involves the selection of grant recipients, particularly Power Forward Communities, which received $2 billion despite having minimal funds at the time of the grant award. The organization reportedly has connections to groups linked to Stacey Abrams, raising questions about political motivations behind the funding decisions. Similarly, Climate United, a nonprofit set to receive nearly $7 billion, paused staff furloughs after receiving a temporary emergency grant from a donor and plans to file for an injunction to release the frozen funds.

The judge’s decision does not allow grant recipients to withdraw money from their accounts, creating a legal limbo where the funds cannot be reclaimed by the government but also cannot be used for their intended purposes. A hearing on the matter is expected in the coming weeks as Climate United and other recipients seek full access to the allocated funds through additional legal action.

Legal Requirements for Overturning Established Grants

The ruling highlights the significant legal hurdles administrations face when attempting to reverse their predecessors’ funding decisions. Judge Chutkan emphasized that the government must follow established grant laws and regulations, regardless of changing political priorities. The EPA’s allegations of mismanagement and fraud were deemed too vague by the court, which demanded more substantial evidence before allowing such a significant financial reversal.

The case illustrates the complex interplay between administrative law and political transitions, revealing how difficult it can be to reverse established funding mechanisms even with a change in executive leadership. For the Trump administration, the ruling represents a significant procedural obstacle in its efforts to redirect climate funding, while for grant recipients, it offers temporary protection but falls short of providing access to the promised resources.