The Trump administration is attempting to claw back $20 billion of grants obligated under the 2022 Inflation Reduction Act's premier clean-energy program.
The IRA allocated $27 billion to the Environmental Protection Agency to set up the Greenhouse Gas Reduction Fund, a key part of the former Biden administration's climate policy. The program as designed to be a kind of national green bank that would spark public and private investment in clean energy projects, especially in low-income areas. It
Trump's new EPA Administrator Lee Zeldin announced on March 11 the agency's decision to terminate the multi-billion grant agreements, saying there were concerns about fraud, waste, and misuse of funds.
"This termination is based on substantial concerns regarding program integrity, objections to the award process, programmatic fraud, waste and abuse and misalignment with the agency's priorities, which collectively undermine the fundamental goals and statutory objectives of the awards," Zeldin said in a
It's part of a wider legal dispute over the Trump administration's authority to terminate or claw back funds that have already been obligated or disbursed by the Biden administration.
Zeldin called the eight groups that won the money politically connected and unqualified, and said the EPA has referred the program to the U.S. Inspector General for review. The Justice Department and the FBI are investigating the program, he said.
The agency will "work to re-obligate lawfully appropriated funds in the GGRF with enhanced controls to ensure adequate governance, transparency, and accountability, consistent with statutory requirements," Zeldin said.
The GGRF's largest grant recipient, Maryland-based Climate United Fund, on March 8
Citibank holds the funds for the program under a financial agent agreement with Treasury. The bank said in court filings that it had frozen the funds in February at the recommendation of the FBI, before being officially ordered to do so by the EPA last week.
A hearing was scheduled for Monday on the request for a temporary restraining order that would force disbursement of $6.9 billion. Judge Tanya Chutkan also ordered the EPA to file a declaration addressing the basis for the grant termination by the end of Monday. In a hearing last week, Chutkan appeared skeptical of the government's arguments for canceling the grants and said they lacked evidence of fraud or abuse.
A separate grantee, the Coalition for Green Capital, which received $5 billion from the GGRF, sued Citibank on March 10 for breach of contract.
Democrats contend the EPA lacks the legal authority to claw back funds already appropriated and obligated by Congress. "Without a shred of evidence, Administrator Zeldin is escalating his unfounded attempts to unilaterally terminate congressionally authorized and contractually obligated funding," said Rhode Island Democrat Sen. Sheldon Whitehouse during a press conference Wednesday. "This is not how the Constitution, the appropriations process or contract law works."
The remaining $7 billion was distributed last April to states, local governments and other entities for solar projects under the "Solar For All" program. The solar money was temporarily frozen in January and February but has since been released.
Only the $20 billion GGRF money remains inaccessible.
