EPA insists it has the right to cancel climate grants

By Jean Chemnick, Lesley Clark | 03/27/2025 01:43 PM EDT

The agency argues in a new legal brief that the $20 billion in grants don’t reflect Trump administration priorities.

Two flags hang off EPA headquarters in Washington.

EPA headquarters in Washington. Justin Sullivan/Getty Images

EPA continued to argue Wednesday that it is under no legal obligation to honor $20 billion in Biden-era climate grants because the awards conflict with Trump administration policy.

A legal brief, filed late Wednesday with the U.S. District Court for the District of Columbia, charges that a federal agency has the inherent right to terminate contracts “for consideration of its priorities.”

The agency is striving to recover billions in green lending grants that have been under contract since last summer with nonprofits that the Biden administration selected to administer EPA’s key climate law program.

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The balance of those awards is held in accounts at Citibank, the financial agent for the Greenhouse Gas Reduction Fund, which aims to fund green energy projects. The money has been frozen for more than a month, and the eight awardees are suing EPA and the bank to release the funds.

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