Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Politics

EPA Claims Congress Killed the Green Bank

The saga of the Greenhouse Gas Reduction Fund takes another turn.

Throwing away a green bank.
Heatmap Illustration/Getty Images

On July 3, just after the House voted to send the reconciliation bill to Trump’s desk, a lawyer for the Department of Justice swiftly sent a letter to the U.S. Court of Appeals for the D.C. Circuit. Once Trump signed the One Big Beautiful Bill Act into law, the letter said, the group of nonprofits suing the government for canceling the biggest clean energy program in the country’s history would no longer have a case.

It was the latest salvo in the saga of the Greenhouse Gas Reduction Fund, former President Joe Biden’s green bank program, which current Environmental Protection Agency Administrator Lee Zeldin has made the target of his “gold bar” scandal. At stake is nearly $20 billion to fight climate change.

Congress created the program as part of the Inflation Reduction Act in 2022. It authorized Biden’s EPA to award that $20 billion to a handful of nonprofits that would then offer low-cost loans to individuals and organizations for solar installations, building efficiency upgrades, and other efforts to reduce emissions. The agency announced the recipients last summer, before its September deadline to get the funds out.

Then Trump took office and ordered his agency heads to pause and review all funding for Inflation Reduction Act programs.

In early March, buoyed by a covert video of a former EPA employee making an unfortunate and widely misunderstood comparison of the effort to award the funding to “throwing gold bars off the edge” of the Titanic, Zeldin notified the recipients that he was terminating their grant agreements. He cited “substantial concerns” regarding “program integrity, the award process, programmatic fraud, waste, and abuse, and misalignment with agency’s priorities.”

In court proceedings over the decision, the government has yet to cite any specific acts of fraud, waste, or abuse that justified the termination — a fact that the initial judge overseeing the case pointed out in mid-April when she ordered a preliminary injunction blocking the EPA from canceling the grants. But the EPA quickly appealed to the D.C. Circuit Court, which stayed the lower court’s injunction. The money remains frozen at Citibank, which had been overseeing its disbursement, as the parties await the appeals court’s decision.

As all of this was playing out, Congress wrote and passed the One Big Beautiful Bill Act. The new law rescinds the “unobligated” funding — money that hasn’t yet been spent or contracted out — from nearly 50 Inflation Reduction Act programs, including the Greenhouse Gas Reduction Fund. According to an estimate from the Congressional Budget Office, the remaining balance in the fund was just $19 million.

The Trump administration, however, is arguing in court that the OBBBA doesn’t just recoup that $19 million, but also the billions in awards at issue in the lawsuit. Congress has rescinded “the appropriated funds that plaintiffs sought to reinstate through this action,” Principal Deputy Assistant Attorney General Yaakov Roth wrote in his July 3 letter, implying that the awards were no longer officially “obligated” and that all of the money would have to be returned. Therefore, “it is more clear than ever that the district court’s preliminary injunction must be reversed,” he wrote.

Roth cited a statement that Shelley Moore Capito, chair of the Senate Environment and Public Works Committee, made on the floor of the Senate in June. She said she agreed with Zeldin’s decision to cancel the Greenhouse Gas Reduction Fund grants, and that it was Congress’ intent to rescind the funds that “had been obligated but were subsequently de-obligated” — about $17 billion in total. She did not acknowledge that Zeldin’s decision was being actively litigated in court.

On Monday, attorneys for the plaintiffs fired back with a message to the court that the reconciliation bill does not, in fact, change anything about the case. They argued that the EPA broke the law by canceling the grants, and that the OBBBA can’t retroactively absolve the agency. They also served up a conflicting statement that Capito made about the fund to Politico in November. “We’re not gonna go claw back money,” she said. “That’s a ridiculous thought.”

Capito’s colleague Sheldon Whitehouse, a Democrat, offered additional evidence on the floor of the Senate Wednesday. He cited the Congressional Budget Office’s score of the repeal of the program of $19 million, noting that it was the amount “EPA had remaining to oversee the program” and that “at no point in our discussions with the majority, directly or in our several conversations with the Parliamentarian, was this score disputed.” Whitehouse also called up a previous statement made by Republican Representative Morgan Griffith, a member of the House Energy and Commerce Committee, during a markup of the bill. “I just want to point out that these provisions that we are talking about only apply as far, as this bill is concerned, to the unobligated balances,” Griffith said.

Regardless, it will be up to the D.C. Circuit Court as to whether the lower court’s injunction was warranted. If it agrees, the nonprofit awardees may still, in fact, be able to get the money flowing for clean energy projects.

“Wishful thinking on the part of DOJ does not moot the ongoing litigation,” Whitehouse said.

You’re out of free articles.

Subscribe today to experience Heatmap’s expert analysis 
of climate change, clean energy, and sustainability.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Politics

Public Transit on the Brink

Riders in Chicago, Philadelphia, and the San Francisco Bay Area are staring down budget crises, with deep service cuts not far behind.

A train going off a cliff.
Heatmap Illustration/Getty Images

Three of the country’s largest public transportation systems are facing severe budget shortfalls that have left them near a breaking point. Transit riders in Chicago, Philadelphia, and the Bay Area of California could see severe service cuts as soon as next year if their representatives don’t secure funding to fill significant gaps in their operations budgets, the result of dwindling ridership and federal aid.

Should these lawmakers fail or fall short, they could kick off what transit advocates refer to as a “death spiral,” where higher fares and worse service leads to lower ridership, which leads to more cuts, etc., until there’s effectively no service left.

Keep reading...Show less
Green
AM Briefing

‘Messy’ at Energy

On Detroit layoffs, critical mineral woes, and China hawks vs. cheap energy

Chris Wright and Donald Trump.
Heatmap Illustration/Getty Images

Current conditions: Two tropical waves are moving westward across the Atlantic, with atmospheric conditions primed to develop into a storm in the Caribbean • Douala, Cameroon’s largest city and economic capital, notched its highest October temperature since records began in the 1800s, at nearly 95 degrees Fahrenheit • In Spain, average temperatures have eclipsed 86 degrees every day of this month so far.


THE TOP FIVE

1. Energy Secretary Chris Wright may be on the outs with Donald Trump

Secretary of Energy Chris Wright. Alex Wong/Getty Images

Keep reading...Show less
Green
Sparks

Major Renewables Nonprofit Cuts a Third of Staff After Trump Slashes Funding

The lost federal grants represent about half the organization’s budget.

The DOE wrecking ball.
Heatmap Illustration/Getty Images

The Interstate Renewable Energy Council, a decades-old nonprofit that provides technical expertise to cities across the country building out renewable clean energy projects, issued a dramatic plea for private donations in order to stay afloat after it says federal funding was suddenly slashed by the Trump administration.

IREC’s executive director Chris Nichols said in an email to all of the organization’s supporters that it has “already been forced to lay off many of our high-performing staff members” after millions of federal dollars to three of its programs were eliminated in the Trump administration’s shutdown-related funding cuts last week. Nichols said the administration nixed the funding simply because the nonprofit’s corporation was registered in New York, and without regard for IREC’s work with countless cities and towns in Republican-led states. (Look no further than this map of local governments who receive the program’s zero-cost solar siting policy assistance to see just how politically diverse the recipients are.)

Keep reading...Show less
Yellow