California sues Trump administration over $1.2 billion hydrogen funding cut

California is suing the Trump administration after federal officials canceled $1.2 billion in funding for a major clean hydrogen project approved by Congress.

California Attorney General Rob Bonta said Wednesday that the state filed the lawsuit in federal court in San Francisco. Colorado and Washington are co-leading the suit.

The lawsuit names the Department of Energy and the Office of Management and Budget (OMB), accusing the Trump administration of unlawfully terminating energy and infrastructure grants created under laws passed by Congress.

ARCHES, short for Alliance for Renewable Clean Hydrogen Energy Systems, was awarded $1.2 billion to expand the use of hydrogen fuel in public transit, trucking, utilities and port operations across California. State officials say the project was expected to reduce emissions and build out a statewide hydrogen market.

According to the complaint, the Department of Energy moved to cancel billions of dollars in energy awards nationwide after President Trump, on his first day back in office, signed executive orders declaring a “national energy emergency” and directing agencies to dismantle programs tied to prior climate legislation.

The lawsuit says the funding was approved by Congress through the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, and federal agencies do not have authority to terminate it.

The complaint asks the court to declare the funding cancellations unlawful and block federal agencies from terminating the programs.

“Trump defied Congress, jeopardized 200,000 good-paying jobs, and put billions in health savings at risk for communities hit hardest by pollution,” Governor Newsom said in a statement. “We won’t let political retaliation wreck our economy or surrender clean energy leadership to China.”