Appeals court blocks EPA's $20B climate grant clawback
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- D.C. Circuit Court of Appeals blocked the Trump administration from rescinding $20 billion in climate grants, with six of its 10 judges upholding a preliminary injunction rejecting EPA's attempts to terminate the Greenhouse Gas Reduction Fund program "based solely on a policy disagreement" with the statute.
- Climate United sued the EPA on March 8 after the agency froze funding, and $6.97 billion disbursed to the nonprofit remains protected from clawback after the court's ruling, with judges citing EPA's stated intent to continue repealing the funds if the injunction were lifted.
- Congress authorized $19.97 billion through the Inflation Reduction Act in 2022, but later repealed unspent EPA IRA funding in the One Big Beautiful Bill Act — and four D.C. Circuit judges ruled that a portion of the preliminary injunction was no longer warranted because of that repeal.
- EPA Administrator Lee Zeldin terminated GGRF funding awarded to eight National Clean Investment Fund and Clean Communities Investment Accelerator entities last December, citing "serious concerns" about self-dealing, conflicts of interest, unqualified recipients, and reduced government oversight — allegations Climate United called "false allegations and misinformation."
- Local governments "have suffered, and remain at risk of further suffering" because they planned projects and made budgetary decisions based on the grants, according to an amicus brief filed February 9 by the National League of Cities and the U.S. Conference of Mayors.
- EPA is reviewing the judgment and considering next steps, with the court noting it is evenly divided on whether the temporary restrictions should continue based on remaining legal arguments — leaving the agency's path forward unresolved.
Why it matters: The ruling keeps roughly $6.97 billion already disbursed to Climate United out of EPA's reach and protects the eight GGRF recipients' ability to fund clean energy, affordable housing, and EV manufacturing projects, but four judges carved out part of the injunction after Congress repealed unspent IRA funding — leaving EPA's next legal move genuinely uncertain.
