A US appeals court on Tuesday upheld a preliminary injunction which prevented the Environmental Protection Agency from effectuating its termination of $20 billion funding issued to several nonprofit groups under the Greenhouse Gas Reduction Fund in March last year.
The United States Court of Appeals for the District of Columbia Circuit found that the EPA's attempt to terminate the grants and claw back already disbursed funds based solely on a policy disagreement likely breached the Inflation Reduction Act's mandatory appropriation.
The EPA has not provided any argument that it would refrain from taking those actions if the injunction were removed, the court said.
On March 11, 2025, EPA Administrator Lee Zeldin terminated $20 billion in funding awarded to eight National Clean Investment Fund and Clean Communities Investment Accelerator entities under the Greenhouse Gas Reduction Fund. The EPA cited alleged concerns related to self-dealing, conflicts of interest, unqualified recipients, and limited government oversight as the reason for the termination.
Five judges upheld the District Court's April 2025 ruling that blocked EPA from terminating the grant agreement solely due to a policy disagreement, one of the plaintiffs in the case Climate United said in a statement issued on Tuesday.
"Today, the DC Circuit Court judges affirmed what we have always known: EPA took actions to unlawfully freeze and dismantle the National Clean Investment Fund grant program," the statement said.
"Despite efforts to harm the awardees with false allegations and misinformation, there remains no legal basis for terminating our grant award and clawing back funds that were already disbursed in our bank accounts," the statement added.
Climate United said it would continue to pursue legal options to unfreeze funds for the program, which was designed to lower energy costs, create jobs, and improve public health.
has reached out to the EPA for comments.