Appeals Court Blocks EPA's $20B Climate Grant Rescission
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- D.C. Circuit Court of Appeals blocked the Trump administration from rescinding $20 billion in climate grants in a three-page unsigned opinion, with 6 of 10 judges overturning an earlier panel decision to uphold a preliminary injunction.
- The court ruled the EPA likely violated the Inflation Reduction Act when it terminated Greenhouse Gas Reduction Fund grants and attempted to claw back $6.97 billion already disbursed to Climate United, rejecting EPA's claim that the freeze was based "solely on a policy disagreement."
- EPA Administrator Lee Zeldin had terminated GGRF funding awarded to eight National Clean Investment Fund and Clean Communities Investment Accelerator entities, citing "self-dealing and conflicts of interest, unqualified recipients, and reduced government oversight."
- Congress originally authorized $19.97 billion through the IRA in 2022, but repealed unspent EPA IRA funding last year via the One Big Beautiful Bill Act — a factor four dissenting judges cited in arguing part of the injunction was no longer warranted.
- The court is evenly divided on whether temporary restrictions on the EPA should continue based on the remaining legal arguments, and said the EPA has not indicated it would not take further steps to repeal the funds if the injunction were lifted.
- Local governments, per a Feb. 9 amicus brief from the National League of Cities and U.S. Conference of Mayors, "planned for projects and made budgetary decisions based on the grants" and "remain at risk of further suffering."
Why it matters: Climate United and other grant recipients retain access to nearly $7 billion already disbursed, and the ruling signals courts will scrutinize EPA's stated rationale for terminating congressionally authorized programs. But with four judges finding part of the injunction unwarranted after Congress repealed unspent funds and the court evenly split on continuing restrictions, the EPA still has room to maneuver on the remaining legal grounds.
