UPDATE: This article includes information from a joint status report released Wednesday afternoon, and additional comments from Evergreen Action and Judge Tanya Chutkan.
A federal judge barred
U.S. District Judge Tanya Chutkan ruled Tuesday that the Trump administration couldn't yet shut down a Biden-era program to finance climate-focused investments, but she stopped short of requiring
The decision came after three nonprofits that had received funding sued
The plaintiffs — the Climate United Fund, the Coalition for Green Capital and Power Forward Communities — had also asked the court to issue a temporary restraining order requiring
In her decision, Chutkan granted the temporary restraining order, writing that the grant recipients have "carried their burden of showing that they will suffer imminent, irreparable harm" unless the bank is barred from sending the grant money back to the government.
The court has not yet decided on the legality of
"Today's decision is a strong step in the right direction," Climate United CEO Beth Bafford said in a statement. "In the coming weeks, we will continue working towards a long-term solution that will allow us to invest in projects that deliver energy savings, create jobs, and boost American manufacturing in communities across the country."
Climate United alleges that
The bank said in its opposition to the plaintiffs' motion last week that it was upholding contractual obligations to the government, including fiduciary duty of loyalty, which it said superseded agreements between the bank and grant recipients.
The Greenhouse Gas Reduction Fund, which Congress approved as part of the Inflation Reduction Act in 2022, was designed to dole out $20 billion to nonprofits. The money was meant to finance climate-focused initiatives in under-resourced sectors and areas, like solar panel installations in low-income communities.
Chutkan wrote in her Tuesday decision that the EPA hasn't provided "credible evidence" to support terminating the grants.
"At the very least, there are serious due process concerns and questions of whether EPA Defendants' actions were 'arbitrary, capricious, an abuse of discretion, otherwise not in accordance with law,'" she said in the opinion.
Banks' latest annual reports, filed in the early weeks of the second Trump administration, provide a window into how the industry is adjusting to a new political climate.
Zeldin, a long-time Trump ally now leading the EPA, said last week that he was shutting down the program, in line with the administration's initiatives to cut government programs across agencies.
The EPA said that under President Joe Biden, the agency had "parked tens of billions of taxpayer dollars at an outside financial institution in a manner that deliberately reduced the ability of EPA to conduct proper oversight." Zeldin added in prepared remarks that the program was being shut down due to "misconduct, conflicts of interest and potential fraud."
"I have taken action to terminate these grants riddled with self-dealing and wasteful spending," Zeldin said. "EPA will be an exceptional steward of taxpayer dollars dedicated to our core mission of protecting human health and the environment, not a frivolous spender in the name of 'climate equity.'"
Lena Moffitt, executive director at climate-focused trade group Evergreen Action, said in a statement that the judge's latest decision was an "important initial victory." She added that businesses and communities where the grants had been allocated are counting on the money being released.
"Today, a federal judge stated what has been clear from the beginning: Zeldin's EPA has failed to provide any real evidence to back up its conspiratorial accusations," Moffitt said. "Congress passed a law mandating the distribution of these investments to deliver cost savings and expand access to cheaper, cleaner energy, and that's exactly where they were going before Lee Zeldin got involved."
