A federal appeals court has blocked the U.S. Environmental Protection Agency from suspending roughly $20 billion in clean energy grants awarded by the prior administration, reversing an effort by EPA leadership to halt the disbursements.
The decision, issued by a divided panel of the U.S. Court of Appeals in Washington, D.C., restored an April 2025 injunction that prevents EPA Administrator Lee Zeldin from terminating grant awards made during the Biden administration. Those awards were intended to lower greenhouse gas emissions and to expand access to renewable energy financing in underserved communities.
The funds at the center of the dispute were designated for entities organized as the National Clean Investment Fund and the Clean Communities Investment Accelerator. They originated from the Greenhouse Gas Reduction Fund - a $27 billion program created in 2022 under the Inflation Reduction Act. The original law was passed without Republican votes, according to the record in the case.
The EPA said it is reviewing the appeals court ruling, and indicated its possible next step could be an appeal to the U.S. Supreme Court. Lawyers representing the nonprofit recipients did not immediately respond to requests for comment.
Administrator Zeldin moved in March 2025 to freeze the grants, arguing the awards did not match his agency's priorities and expressing concerns that they could be vulnerable to fraud, waste and abuse. An injunction previously ordered the government to allow disbursement of the contested funds, but that injunction was temporarily stayed while the EPA pursued appeal rights.
Legal history in the litigation includes a September decision by the appeals court in which a 2-1 panel found the nonprofits should have brought their monetary claims in the Court of Federal Claims - the venue that handles money claims against the government.
Tuesday's ruling came from an evenly split 10-judge panel. The full court upheld the April injunction, with six judges specifically affirming the provision that governs the contested grants. In those judges' view, the agency's effort to cancel the awards and claw back funds "based solely on a policy disagreement" likely ran afoul of the Inflation Reduction Act, and the EPA gave no assurance it would refrain from attempting to recoup the money if the injunction were lifted.
Four judges on the panel would have vacated the provision that governs the grants. Their separate position cited Congress' passage last year of Republican President Donald Trump's One Big Beautiful Bill Act, which repealed the portion of the 2022 law that created the grant program.
The disputed funds are being held at Citibank pending resolution of the case. Awarded recipients include nonprofit organizations such as the Climate United Fund and the Coalition for Green Capital, along with a number of U.S. state-sponsored entities.
Contextual note: The appeals court ruling restores judicial limits on the agency's ability to unilaterally terminate congressional grant awards while litigation remains pending.