Judge Blocks EPA from Freezing Funds for Climate Nonprofits

In a significant win for climate action, a federal judge has ordered the Environmental Protection Agency (EPA) and Citibank to restore access to funds for three nonprofit organizations that were recipients of grants from the Greenhouse Gas Reduction Fund.

The Greenhouse Gas Reduction Fund was established as part of the Inflation Reduction Act signed into law in 2022. It provides $27 billion in funding to support projects and initiatives aimed at reducing greenhouse gas emissions.

However, the EPA had moved to terminate the contracts with the three nonprofits - Climate United, Power Forward, and another unnamed organization - and asked Citibank to freeze their accounts. The EPA cited concerns about "waste, fraud, and conflicts of interest" as the reason for the terminations.

In her ruling, Judge Tanya Chutkan of the U.S. District Court for the District of Columbia found the EPA's actions to be "arbitrary and capricious." She stated that the agency's claims were "vague and unsubstantiated" and that it had failed to follow the proper procedures for terminating the grants.

The judge issued a temporary restraining order, requiring the EPA and Citibank to restore the nonprofits' access to their funds. This is a significant victory, as the nonprofits had already committed hundreds of millions of dollars to various climate projects, including solar installations in rural areas and in partnership with tribal communities.

Climate United, for example, had committed $392 million to eligible projects, while Power Forward had committed $539 million. The freeze on their accounts had left them unable to pay outstanding invoices and put their projects at risk.

In her ruling, Judge Chutkan found that the nonprofits would suffer "imminent, irreparable harm" if they did not regain access to their funding. She also determined that they had a "substantial likelihood of success" in winning the case against the EPA.

This decision serves as a rebuke to the EPA's actions and underscores the importance of ensuring that climate funding reaches the intended recipients. It also highlights the need for transparency and due process when government agencies make decisions that impact critical environmental initiatives.

As the fight against climate change intensifies, this ruling sends a clear message that the courts will not tolerate arbitrary and capricious actions that undermine efforts to reduce greenhouse gas emissions and promote sustainable solutions.