An appeals court on Tuesday handed a victory to a group of federal grant recipients that the Trump administration has prevented from spending billions of dollars in climate funding for over a year.
In a split decision, 10 judges on the U.S. Court of Appeals for the District of Columbia Circuit upheld an earlier injunction that said the Environmental Protection Agency could not terminate $20 billion in climate grants, and that the recipients should have access to the funds as their case proceeds.
If the E.P.A. does not appeal the decision to the Supreme Court in the next seven days, the judgment will effectively reinstate much of the Greenhouse Gas Reduction Fund, a Biden-era “green bank” initiative that supports low-cost loans and investments for renewable energy projects across the country.
Brigit Hirsch, an E.P.A. spokeswoman, said the agency is reviewing the judgment and considering next steps. It could appeal to the high court and ask that the funds remain frozen in the meantime.
“It’s screamingly good news for the plaintiffs,” said Michael Gerrard, director of the Sabin Center for Climate Change Law at Columbia University, though he said the legal process could continue to drag on for a long time.
Last February, the E.P.A. administrator, Lee Zeldin, attempted to claw back $20 billion in climate grant funding that the Biden administration had awarded to eight nonprofit groups. Mr. Zeldin suggested the program was vulnerable to waste, fraud and abuse, citing a hidden-camera video released by the right-wing group Project Veritas in which a former E.P.A. staff member likened the outgoing administration’s spending to throwing “gold bars” off the Titanic.
Despite investigations by the agency’s inspector general, the Justice Department and the F.B.I., the government never substantiated these claims. Several of the nonprofits sued to force the money out, and in April 2025, U.S. District Judge Tanya Chutkan of the District of Columbia issued a preliminary injunction preventing the E.P.A. from canceling the grants and allowing the groups to access the money during the litigation. But the E.P.A. appealed that decision, and the program has been in limbo since.
“The practical effect of this is to eliminate that deep freeze,” said David A. Super, a professor at Georgetown Law.
The delay has taken a toll on the grant recipients, which relied on the funds for basic expenses like payroll and office rent. Beth Bafford, the chief executive of the lead plaintiff, Climate United, left the organization in March and was not replaced. Other groups have laid workers off. Power Forward Communities, which received $2 billion in grants, was down to two employees earlier this year.
On Tuesday, the nonprofit plaintiffs celebrated the judgment. Representatives for Justice Climate Fund and the Coalition for Green Capital said they were looking forward to moving forward with their work.
“Today, the D.C. Circuit Court judges affirmed what we have always known: E.P.A. took actions to unlawfully freeze and dismantle the National Clean Investment Fund grant program,” Climate United said in a statement. “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.”
If the E.P.A. does not appeal to the Supreme Court, the case will proceed in federal court, either moving to trial or summary judgment. The grant recipients will be able to access their funds in the meantime.
