A US federal appeals court on Tuesday ruled that the Environmental Protection Agency (EPA) cannot claw back approximately $20 billion in clean energy grants from several non-profit groups, delivering a setback to the Trump administration.
The decision, issued by an en banc panel of the US Court of Appeals for the District of Columbia Circuit, reinstated an April 2025 injunction against EPA Administrator Lee Zeldin’s order to terminate the grants. The funding had originally been awarded under former President Joe Biden’s Inflation Reduction Act to support greenhouse gas reduction projects and expand green financing access for underserved communities.
Disbursement of the contested funds to non-profit entities—including the Climate United Fund and the Coalition for Green Capital—remains temporarily paused to allow the EPA time to pursue an appeal before the US Supreme Court. The EPA confirmed that it is evaluating its options.
The legal dispute stems from March 2025, when Zeldin sought to freeze and reclaim the $20 billion allocation, alleging potential fraud and arguing the grants did not align with current administration priorities. However, six of the ten judges on the appeals panel determined that attempting to revoke awarded grants based purely on policy disagreements likely violated the governing legislation.
The ruling reverses a September decision by a three-judge panel that had temporarily allowed the agency to halt funding. While Climate United welcomed the decision, noting there was no legal foundation for terminating its $7 billion award, the court’s four dissenting judges argued the grants should be vacated following subsequent legislative updates to the law.
