EPA Shifts SRF Priorities Under Trump Orders, Scaling Back Climate and EJ Focus

The U.S. EPA’s fiscal year 2025 allotment for State Revolving Funds (SRFs) signals a major shift in direction for federal water infrastructure funding. Beginning this year, the agency will no longer require states to consider climate change and environmental justice (EJ) policies when distributing billions in Bipartisan Infrastructure Law (BIL) funding—a significant departure from Biden-era priorities.

This change stems from recent executive orders issued by President Trump, which roll back prior directives related to climate and equity considerations. In a May 15 memo, Peggy Browne, acting assistant administrator for EPA’s Office of Water, confirmed that these orders now override previous implementation guidance for the Clean Water and Drinking Water SRF programs. The agency will instead focus solely on statutory and regulatory program requirements.

According to the memo, EPA’s updated approach supports its “Powering the Great American Comeback Initiative,” emphasizing cooperative federalism and deferring to states to identify their own public health and water quality priorities. By removing additional federal climate and equity requirements, EPA says it hopes to streamline compliance and reduce administrative burdens for states.

However, this policy shift raises serious questions for states and communities that had been relying on SRF guidance to prioritize historically underserved areas. Erik Olson of the Natural Resources Defense Council notes that many states have used SRF resources to help rural and lower-income communities that struggle to fund basic water infrastructure. With the removal of EJ considerations, Olson cautions that these communities may face new obstacles accessing support.

Further complicating matters is the fact that the BIL explicitly requires that 49 percent of SRF capitalization grants be directed to “disadvantaged communities.” Reconciling that mandate with executive orders that prohibit equity-based decision-making may prove difficult. While EPA has not formally prohibited consideration of equity yet, officials say enforcement of the new executive orders will begin in earnest with FY26 SRF reviews.

For now, states still have discretion to shape their Intended Use Plans (IUPs), but the future of climate and equity priorities in federal water infrastructure funding remains uncertain. EPA has said more guidance is on the way.

This evolving policy landscape will be important to watch—not only for state financing authorities and utilities but also for communities that were promised greater access to clean water through BIL funding. Engineering firms, consultants, and utilities may see fewer administrative hurdles and more flexibility in project design and selection. However, it could also lead to more variability between states, as some may continue to prioritize equity on their own while others pivot entirely toward cost-efficiency and traditional compliance metrics. Navigating this evolving patchwork will require close attention to state-level guidance and federal updates as EPA continues to align SRF implementation with the new executive directives.