Washington: The Trump administration has halted $20 billion in funding for greenhouse gas reduction projects, a decision that climate advocates and Democrats argue unlawfully redirects money allocated for clean energy and transportation for disadvantaged communities.

Environmental Protection Agency Administrator Lee Zeldin had publicised his campaign to claw back money from the Greenhouse Gas Reduction Fund, which Congress appropriated under the Biden administration to kick-start projects aimed at curbing pollution.

In a statement late on Tuesday, the EPA said it had clawed back the funds, saying the program did not align with the agency's priorities and citing concerns with potential fraud, waste and abuse, although it gave no details. The US Justice Department and the FBI are reviewing the program, it added.

The EPA said it would work to use the funds "with enhanced controls" within the law but did not say specifically what it would do with the money. "EPA will be an exceptional steward of taxpayer dollars dedicated to our core mission of protecting human health and the environment, not a frivolous spender in the name of 'climate equity'," Zeldin said.

Congress appropriated the $20 billion through the 2022 Inflation Reduction Act under Democratic President Joe Biden. Under his successor, Republican Donald Trump, the EPA has sought to freeze funding related to climate change and environmental justice amid legal challenges.

Over the weekend, the Climate United Fund advocacy group sued the EPA and Citigroup's Citibank for withholding the funds and breaking what it called a legally-binding contractual agreement as an awardee, saying it and seven other recipients have been unable to access the money.