A divided federal appeals court put a multibillion-dollar clean-energy program back in the legal driver's seat Tuesday after the Trump administration tried to kill it. The full U.S. Court of Appeals for the D.C. Circuit said the Environmental Protection Agency improperly terminated grants to Climate United Fund and other nonprofits, but the money will not start moving immediately. The administration still has a short window to ask the Supreme Court to intervene.
The Associated Press reports that the full court's divided ruling rejected the administration's effort to terminate the Biden-era Greenhouse Gas Reduction Fund, commonly called a green bank. Climate United and other nonprofit recipients sued after EPA froze billions of dollars held in a Citibank account and canceled the grants.
The disputed awards came from a program Congress created through the 2022 Inflation Reduction Act. The EPA originally described the $27 billion fund as a way to leverage private capital for projects including solar power, energy-efficient buildings and cleaner transportation, with an emphasis on low-income and disadvantaged communities, according to EPA program materials.
EPA Administrator Lee Zeldin said the grants were terminated over alleged program-integrity problems, including potential fraud, conflicts of interest and inadequate oversight, according to the agency's March 2025 announcement. The nonprofits disputed the allegations and argued that the administration could not simply refuse to spend money Congress had already authorized; Climate United pointed to its existing compliance controls and financial reporting in a public response to EPA.
What The Appeals Court Decided
The ruling came after a three-judge panel in September 2025 sided with the administration and said the government had broad power to cancel the grants. That earlier decision overturned a lower-court injunction, as detailed in the D.C. Circuit opinion, before the full court agreed to rehear the case in an unusual en banc proceeding.
The latest decision is not an immediate release of the cash. The EPA will keep the ruling on hold for several days while it considers asking the Supreme Court to step in, meaning the nonprofits have won the legal round but remain stuck waiting on the funds, according to WKMG News 6.
Why The Green Bank Fight Matters
Supporters say the program was designed to make clean-energy projects easier to finance in communities that traditional lenders often overlook. Climate United describes its model as a way to blend federal dollars with private investment for solar, building upgrades and electric transportation, rather than operate as a conventional federal spending program, according to the organization's program overview.
For the Trump administration, the case tests how far a new policy direction can go in undoing grant commitments made by a previous administration. For the nonprofits, it is a race against time: even a court victory may do little if the funds remain frozen long enough to stall projects, partnerships and private financing, a concern underscored by the Associated Press.
