The Scoop
Beneficiaries of a $20 billion clean-energy program that the Trump administration wants to claw back might sue to keep the money, a leader of one such group told Semafor.
Under the new leadership of Administrator Lee Zeldin, the US Environmental Protection Agency wants to knock down the Greenhouse Gas Reduction Fund, citing concerns that the money — ostensibly to support low-carbon energy projects in disadvantaged communities — is being doled out “in a rush job with reduced oversight.”
“The days of irresponsibly shoveling boatloads of cash to far-left activist groups in the name of climate justice and environmental equity are over,” Zeldin posted on X last week.
But retrieving the money won’t be easy, in part because the nonprofits selected to disburse it countrywide could sue to block the effort, said Lenwood Long, Sr., chair of the board of the Justice Climate Fund, a coalition of community development nonprofits that was awarded $940 million from the GGRF.
“It is shameful that such actions are being considered,” he said. “These are not pork-barrel projects. These are seasoned organizations that have been doing lending and housing for decades.”
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Tim’s view
The GGRF was lauded by many climate advocates as an innovative approach to spurring energy investment in lower-income communities that were less likely to benefit from traditional clean energy tax credits. Its sizable budget made it one of the biggest single initiatives created by the Inflation Reduction Act, and one of the Biden administration’s primary vehicles for supporting climate equity. In the Trump administration, it’s hard to imagine a more glaring target, so the GGRF was always at risk. But ending the program could also undermine the administration’s promise to cut household energy bills.
“I just hate to fathom that this fund would be totally eviscerated,” said Long, who is also CEO of an advocacy group for Black-led community banks. “It’s a sad day in America when we can’t recognize that economic systems are not equal for Black America.” (A spokesperson for Long’s Alliance of African American CDFI CEOs later emailed to say that Long was speaking in a personal capacity in the preceding statement and his views did not necessarily represent those of JCF.)
Just last week the Justice Climate Fund disbursed its first tranche of funding, giving out about $214 million to projects in mostly minority communities working on things like installing residential or community solar projects, upgrading the energy efficiency of multifamily housing units, and installing EV charging stations. These projects are meant to use the GGRF money, and the technical expertise of groups like JCF, to attract additional private investment. None of the funding has been affected yet, Long said, and JCF is continuing to work on its second tranche of projects.
Compared to other caches of federal funding the Trump administration has sought to freeze or claw back, Zeldin faces a tough obstacle in that all $20 billion is already sitting in an account managed by Citibank. Zeldin has said he wants to cancel that contract and get the money back. But former EPA officials told Inside Climate News that under Citibank’s arrangement, funds can only be withdrawn if there’s evidence of fraud on Citibank’s part, which Zeldin was careful to say he has “zero reason to suspect.” A Citibank spokesperson didn’t return a request for comment.
The View From Germany
Germany’s closely-watched weekend election could lead to a significant reversal of climate-friendly policies in Europe’s richest economy. The center-right opposition is expected to emerge triumphant in a campaign that has made little mention of environmental issues, DW noted, with the economy and immigration taking greater prominence. Friedrich Merz, the country’s likely next chancellor, has spoken disparagingly of wind turbines, and has faced growing pressure from the far-right AfD party, which has sought to curtail wind power. Budgetary constraints have already made Germany’s chances of hitting its climate targets appear remote, and green policies look likely to be given short shrift.
Notable
- Federal clean energy lending will also be slowed by mass layoffs last week at the Department of Energy. Up to 2,000 employees were let go from DOE, including from the Loan Programs Office, a grid improvement office, and a nuclear waste management site in Washington.