A federal appeals court has cleared the way for the Trump administration to claw back $20 billion from a “climate bank” established by the Biden administration.
The U.S. Court of Appeals for the District of Columbia overturned a March ruling by a lower court which had prevented the Environmental Protection Agency from taking away the money.
The funds were awarded to eight non-profit organizations as part of the now-defunct Greenhouse Gas Reduction Fund. The fund allocated $27 billion for clean energy projects, including solar panel installations and electric vehicle sales. The money was deposited at Citibank, where it continues to sit.
Five of the groups joined a lawsuit against the EPA and Citibank, alleging they were illegally withholding obligated funds, to the detriment of communities the non-profits serve.
A lower court judge had sided with the groups, questioning whether the EPA had used the proper legal procedures to terminate the grants. The judge issued a preliminary injunction preventing the EPA from “unlawfully suspending or terminating” the awards and ordered Citibank to release the money to the grant awardees.
But, the district court “abused its discretion in issuing the injunction,” Circuit Judge Neomi Rao wrote Tuesday.
The new decision said that the government is responsible for ensuring “proper oversight and management of this multi-billion-dollar fund” on behalf of the public.
EPA Administrator Lee Zeldin celebrated the “massive” win.
“After the Biden EPA set up the Greenhouse Gas Reduction Fund through self-dealing and conflicts of interest, unqualified recipients and reduced agency oversight, I terminated these grants completely!” he posted on X.
However two non-profits said they would not give up the fight for their funds which totaled nearly $9 billion. The five groups who challenged the EPA were expecting to receive $16 billion and are likely to file additional litigation, according to POLITICO.
“While we are disappointed by the panel’s decision, we stand firm on the merits of our case: EPA unlawfully froze and terminated funds that were legally obligated and disbursed,” Climate United CEO Beth Bafford said in a statement. “This is another hurdle in our fight to lower energy costs for those who need it most while creating jobs for hardworking Americans, but we will continue to press on for communities across the country that stand to benefit from clean, abundant, and affordable energy.”
Tim Mayopoulos, the chief executive of Power Forward Communities, said his group has long known that “this would likely be a protracted fight,” according to Bloomberg Law. The group “is confident in the strength of its case,” he said.
Republicans had previously called the green bank a “slush fund,” and voiced concern about transparency in how it would be used. But, former Vice President Kamala Harris said the grants would help to ensure that families, small businesses, and community leaders have access to the capital they need to “make climate and clean energy projects a reality in their neighborhoods.”
The Trump administration has been working to reverse climate policy and regulations, including the landmark climate finding that greenhouse gas emissions are harmful to human health. Environmental groups are also suing the Trump administration for convening climate skeptics to author a report serving as a basis for that reversal, as scientists warn of a dire future in a worsening climate crisis without drastic action.
