Climate United sues EPA and Citibank for frozen IRA funds

Climate United, one of the three coalitions selected by President Joe Biden’s EPA to lend $20 billion to local decarbonization projects — aka America’s “green bank” — sued Trump’s EPA head Lee Zeldin and Citibank for freezing the funds March 10. According to Climate United, neither the EPA nor Citi produced the evidence to justify suspending the accounts.

“Statements by both Citibank and EPA’s Administrator strongly suggest that EPA has caused Citibank’s illegal actions,” the lawsuit Climate United’s charges.

Climate United’s lawsuit is likely just the beginning of court battles should the administration continue to withhold legally allocated federal funds.

More court battles to come

The court rulings and ongoing legal disputes continue to create an air of chaos and uncertainty around decarbonization projects. No corporation, like Citi, wants to be placed in the middle of either side’s agenda. But that’s exactly where the bank finds itself.

“Plaintiff Climate United Fund seeks a temporary restraining order that would halt Citibank’s illegal refusal to honor Climate United’s requests for funds to which Climate United is legally entitled,” the Climate United says. Climate United accuses Citi of halting all correspondence from Feb. 18 — when the funds were frozen — to March 3, when the bank informed Climate United it was “awaiting further guidance” from the EPA.

On March 5 Citi provided its first public statement to Trellis, saying it had no discretion over grant funds and would “of course comply with any binding instructions from the federal government.”

Effects on local economies

Local economies across the U.S. will be affected if the funding remains halted.

“Climate United’s investments also mobilize private capital,” wrote Climate United CEO Beth Bafford in a declaration filed alongside the suit. “Stretching public dollars further: for every dollar invested in a program or project, Climate United estimates up to four dollars of private capital will flow into communities.”

Trellis will continue to report on this story as it unfolds.

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