Trump's Proposed Legislation Aims to Bolster EPA's Efforts in Recovering Multibillion-Dollar Green Bank Funds
In the midst of the ongoing legal dispute, the Environmental Protection Agency (EPA) and Citibank, the administrator of the Greenhouse Gas Reduction Fund (GGRF), are currently barred from terminating or returning the grants, following a series of court injunctions.
The legal status as of mid-2025 is that the EPA and Citibank are maintaining a frozen status quo, unable to terminate or return the GGRF grants while litigation proceeds. This decision comes after the U.S. District Court granted a preliminary injunction to Climate United Fund in March 2025, ordering Citibank to disburse funds properly and hold remaining funds rather than return them to the government.
The EPA and Citibank appealed this injunction to the U.S. Court of Appeals for the D.C. Circuit, which administratively stayed the injunction partially, halting the requirement to disburse funds but requiring that the frozen funds not be returned to the government. Oral arguments were held in May 2025, and briefing is complete.
Multiple related lawsuits have been consolidated, including a case filed by Opportunity Finance Network regarding the withholding and termination of another grant under GGRF. Another related case, Sustainability Institute v. Trump, concerning frozen federal grant funds including some under climate programs, is ongoing with the Fourth Circuit Court of Appeals.
The EPA's appeal put Judge Tanya Chutkan's order on hold, which previously ruled that the EPA cannot terminate the contracts of the green bank's recipients and that the groups should have access to some of their frozen money.
The GGRF grants were established under the 2022 Inflation Reduction Act, but their repeal has been challenged due to the ongoing court injunctions and appeals. Climate United Fund disagrees with the EPA's claim that most of the money had been disbursed and is unaffected by the bill, stating that most of the funds have already been obligated to the green bank's recipients.
The bill that passed Congress would rescind money that hadn't already been obligated to the green bank's recipients. The Congressional Budget Office estimates that repealing the program would save $19 million, which is in line with its administrative expenses only.
The EPA's decision to terminate the grants was met with criticism from Republican Sen. Shelley Moore Capito, who expressed concern with the EPA's administration of the green bank under the Biden administration, the agency's selection of grant recipients, and the absence of meaningful program oversight.
The green bank's goals run counter to the Trump administration's opposition to policies that address climate change and its embrace of fossil fuels. The tax and policy bill that passed Congress repeals a multibillion-dollar green bank for financing climate-friendly projects.
The EPA did not provide evidence of fraud when asked by the federal government, and the agency's administrator, Michael Regan, has been accused of characterizing the $20 billion in grants as a scheme marred by conflicts of interest and potential fraud. However, the EPA argues that the case is a contract dispute and should be heard by a court that can only award a lump sum, not force the government to keep the grants in place.
The outcome of the legal battle remains unsettled pending further judicial rulings. The EPA, along with other defendants, is being sued by Climate United Fund and other nonprofits over access to funds from the Greenhouse Gas Reduction Fund (green bank).
- The ongoing legal dispute over the Greenhouse Gas Reduction Fund (GGRF) has prevented the Environmental Protection Agency (EPA) and Citibank from terminating or returning the grants, with Judge Tanya Chutkan issuing an order that the EPA cannot terminate the contracts of the green bank's recipients.
- The EPA's decision to appeal the preliminary injunction, which was issued by the U.S. District Court and ordered Citibank to disburse funds properly, has put Judge Chutkan's order on hold.
- Climate United Fund, one of the parties involved in the litigation, disagrees with the EPA's claim that most of the GGRF money had been disbursed, stating that most of the funds have already been obligated to the green bank's recipients.
- Republican Sen. Shelley Moore Capito expressed concern with the EPA's administration of the green bank under the Biden administration, the agency's selection of grant recipients, and the absence of meaningful program oversight.
- The green bank's goals oppose the Trump administration's policies regarding climate change, as the tax and policy bill that passed Congress repeals a multibillion-dollar green bank for financing climate-friendly projects.
