The Trump administration announced the cancellation of nearly $8 billion in climate-related funding as part of a broader effort to address federal budget constraints during the government shutdown. Office of Management and Budget (OMB) Director Russ Vought stated the funds, labeled the “Green New Scam,” were intended to advance what he described as leftist climate agendas. The affected projects span states including California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, New York, New Mexico, New Jersey, Oregon, and Washington, with only New Hampshire and Vermont excluded. Most of these states are governed by Democratic leaders.

CBS News reported that the move follows a separate decision to pause approximately $18 billion in infrastructure projects in New York City, including the Hudson Tunnel and Second Avenue Subway. Vought cited concerns over “unconstitutional DEI principles” — a reference to diversity, equity, and inclusion policies — as justification for the hold. The Department of Transportation noted that civil rights staff overseeing reviews of these projects had been furloughed due to the shutdown, delaying evaluations.

The U.S. Department of Energy (DOE) confirmed the termination of 321 financial awards supporting 223 projects, resulting in $7.56 billion in savings for taxpayers. A DOE statement claimed the canceled initiatives failed to meet energy needs, lacked economic viability, and offered poor returns on investment. Secretary of Energy Chris Wright framed the cancellations as fulfilling President Trump’s pledge to prioritize “affordable, reliable, and secure energy.”

California’s hydrogen hub, the Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES), was among the affected projects. The state had received $1.2 billion in federal grants under the Biden administration for clean energy development. The DOE’s decision came days after it announced plans to expand fossil fuel production, including opening 13 million acres for coal mining and allocating $625 million to modernize coal-fired power plants.

California Gov. Gavin Newsom criticized the move, calling it a rejection of “common sense” and emphasizing the state’s commitment to clean energy. He stated, “Clean hydrogen deserves to be part of California’s energy future,” despite federal actions.