Minnesota sues Trump’s EPA and Citibank over Green Bank funding freeze

Minnesota has taken legal action against the US Environmental Protection Agency (EPA) and Citibank, arguing that the federal government unlawfully froze $25 million in green energy funding.

The lawsuit, led by Attorney General Keith Ellison, is part of a broader legal battle over the Trump administration’s decision to halt climate-related spending.

At the centre of the dispute is the Greenhouse Gas Reduction Fund, a $20 billion programme established under the Inflation Reduction Act to support green banks—institutions that finance clean energy projects.

Minnesota’s state-run green bank had planned to use its share of the funds for initiatives such as geothermal heating in public housing and solar panel installations in schools.

However, EPA Administrator Lee Zeldin halted the programme in March, calling it a “gold bar scheme” and alleging that billions in taxpayer dollars had been placed in outside financial institutions with limited oversight.

The claim was based, in part, on a hidden-camera video from the conservative group Project Veritas, in which an EPA employee described efforts to distribute grant money before Trump took office as “throwing gold bars off the Titanic.”

Minnesota’s lawsuit argues that the EPA’s actions violate the Administrative Procedures Act and the Impoundment Control Act, which prevent federal agencies from withholding congressionally approved funds.

A federal judge has issued a temporary restraining order blocking the EPA from withdrawing the money, but a final decision remains uncertain.

With $5 billion in loan requests already submitted to Minnesota’s green bank, the outcome of this case could determine the future of state-led clean energy projects.

As legal proceedings continue, the dispute highlights the broader clash between the Biden administration’s climate policies and the Trump administration’s push to roll them back.