EPA Terminates $20 Billion in Biden-Era Climate Grants

WASHINGTON — The Environmental Protection Agency (EPA) has officially terminated $20 billion in federal climate grants issued under the Biden administration’s Greenhouse Gas Reduction Fund, commonly known as the “green bank.” The decision, announced by EPA Administrator Lee Zeldin, follows a prior freeze on the funds and has sparked significant legal and political controversy.

EPA Cites Oversight Concerns and Risk

Zeldin, who assumed his role in late January, described the grants as part of a scheme with potential conflicts of interest and inadequate government oversight.

“Twenty billion of your tax dollars were parked at an outside financial institution, in a deliberate effort to limit government oversight—doling out your money through just eight pass-through, politically connected, unqualified, and in some cases, brand-new nonprofit organizations,” Zeldin stated in a video released Tuesday night.

He justified the termination by emphasizing the agency’s responsibility to prevent waste and ensure lawful allocation of funds. According to Zeldin, the decision aligns with the intent of existing laws, which require strict oversight of federal funding.

Legal Challenges from Affected Nonprofits

The decision has prompted lawsuits from three nonprofit organizations—Climate United Fund, the Coalition for Green Capital, and Power Forward Communities. These groups, which were among the eight selected to administer the grants, argue that the EPA’s actions violate their contractual rights and jeopardize critical climate initiatives.

Climate United Fund has claimed that the EPA, in collaboration with Citibank, unlawfully denied it access to $7 billion designated for clean energy investments. The Coalition for Green Capital and Power Forward Communities have similarly accused the bank of improperly freezing an additional $7 billion intended to finance clean energy and environmental justice projects.

A federal court hearing on one of the lawsuits is scheduled for Wednesday, where plaintiffs seek to overturn the funding freeze and reinstate access to the grants.

Political Divide Over Green Bank Funding

The green bank initiative, established in 2022 through the Inflation Reduction Act, aimed to fund projects that reduce greenhouse gas emissions and promote clean energy adoption. While congressional Democrats have lauded the program as a necessary tool to address climate change and create jobs, Republican lawmakers have frequently criticized it as a “slush fund” with insufficient accountability.

Sen. Sheldon Whitehouse (D-R.I.), a leading Democrat on the Senate Environment and Public Works Committee, condemned Zeldin’s decision, asserting that it lacked legal justification. “Without a shred of evidence, Administrator Zeldin is escalating his unfounded attempts to unilaterally terminate congressionally authorized and contractually obligated funding that would lower household energy costs, spur economic growth, and cut pollution,” Whitehouse stated.

Ongoing Investigations and Future Implications

The controversy extends beyond the EPA, as the Department of Justice and FBI have reportedly launched investigations into the administration of the Greenhouse Gas Reduction Fund. Whitehouse, however, has criticized these investigations as politically motivated attempts to justify the grant terminations.

The Biden administration’s green bank program had planned to distribute funds to tens of thousands of clean energy projects nationwide. With the termination, the future of these initiatives remains uncertain, as both legal battles and potential congressional actions could determine the fate of the allocated funds.

Key Takeaways:

The EPA, under Administrator Lee Zeldin, has terminated $20 billion in climate grants issued during the Biden administration, citing oversight and fraud concerns.

Three nonprofit organizations that were awarded funding have filed lawsuits challenging the decision, arguing that the freeze is unlawful.

The move has intensified partisan divisions, with Democrats calling it an attack on climate initiatives and Republicans defending it as necessary financial oversight.

A federal court hearing is scheduled to address the legal challenges from affected organizations.

The Justice Department and FBI are investigating the handling of the Greenhouse Gas Reduction Fund, though Democrats claim these efforts are politically driven.

The termination of the grants marks a significant shift in federal climate policy, setting the stage for ongoing legal and legislative battles over the future of clean energy funding in the U.S.