EPA terminated $20B Greenhouse Gas Reduction Fund green-bank grants after unexplained Citibank account freeze

On March 11, 2025, EPA Administrator Lee Zeldin formally terminated the grant agreements of all eight recipients of the Greenhouse Gas Reduction Fund's National Clean Investment Fund and Clean Communities Investment Accelerator programs, canceling roughly $20 billion in financing for clean-energy "green bank" lending. The fund was created by Congress through the Inflation Reduction Act's $27 billion appropriation to help green banks finance renewable-energy and energy-efficiency projects nationwide. Recipients included Climate United Fund ($7 billion), the Coalition for Green Capital ($5 billion), and Power Forward Communities ($2 billion), among five others.

The termination followed a February 18, 2025 freeze: at the direction of the EPA, the EPA's inspector general, the FBI, and the Treasury Department, Citibank — the financial agent holding the grant funds — froze recipients' accounts with no prior notice or explanation. Zeldin said the termination was based on "substantial concerns regarding the [GGRF] program integrity, the award process, programmatic fraud, waste, and abuse," and characterized the grantees' conduct as "throwing gold bars off the Titanic." EPA did not publicly produce evidence supporting the fraud allegations at the time of termination, and referred the matter to its Office of Inspector General alongside ongoing DOJ and FBI investigations.

Climate United Fund and other grantees sued EPA and Citibank, arguing the freeze and termination violated the Administrative Procedure Act and unlawfully withheld funds Congress had already appropriated. In April 2025, U.S. District Judge Tanya Chutkan issued a preliminary injunction finding the administration's actions likely unlawful and ordering the funds released; that injunction was stayed pending EPA's appeal.

Updates

2025-07-04 — Congress's tax law included a disputed rescission of GGRF funds [8]

The "One Big Beautiful Bill Act," signed into law July 4, 2025, included a budget- reconciliation provision (Section 60002) that the Trump administration and Department of Justice characterized as rescinding roughly $17 billion in already-obligated Greenhouse Gas Reduction Fund grant money. The Congressional Budget Office's official score of the provision, and congressional Democrats including Sen. Sheldon Whitehouse, said the rescission language reached only about $19 million in unobligated administrative funds, disputing the larger figure. The scope of the rescission remained contested within the ongoing D.C. Circuit litigation over EPA's termination of the grants.

2025-09-02 — Divided D.C. Circuit panel reversed injunction, let EPA keep grants terminated [5, 9]

On September 2, 2025, a divided three-judge panel of the U.S. Court of Appeals for the D.C. Circuit ruled 2-1 that the district court lacked jurisdiction to hear the grantees' claims, allowing EPA to proceed with terminating the roughly $16-20 billion in grants while the underlying suit proceeded in a different forum.

2026-08-04 — Full D.C. Circuit, sitting en banc, reversed the panel and restored the injunction [6, 7]

On August 4, 2026, the full U.S. Court of Appeals for the D.C. Circuit, sitting en banc, reversed the September 2025 panel decision by a divided vote, restoring the April 2025 injunction against EPA's termination and finding EPA likely violated the Inflation Reduction Act by ignoring statutory limits on its authority to cancel the grants. Disbursement of funds remained on hold to give EPA time to seek Supreme Court review; EPA said it was reviewing its next steps.