When the Environmental Protection Agency began canceling the Greenhouse Gas Reduction Fund in 2025 near the start of President Trump’s second term, EPA head Lee Zeldin declared it the end of “throwing gold bars off the Titanic.”
Created in 2022 by the Inflation Reduction Act and often referred to as a “green bank,” the program was considered former President Joe Biden’s hallmark move to address the growing climate crisis. It was designed to spur private financing for an array of clean energy projects, with an emphasis on Black and low-income communities.
Last month, a federal appellate court blocked the EPA’s efforts to freeze $20 billion in grants being administered by nonprofits for projects across the country to reduce greenhouse gas emissions. The August 4 decision by the full 10-member Court of Appeals for the District of Columbia stated that the EPA wrongly canceled the grants “based solely on a policy disagreement.”
That ruling came about year after a three-judge panel of the same court had overturned a lower court’s decision and ruled that the Trump administration had authority to cancel the grants. The panel said the issue was purely contractual and should have been tried in a federal claims court.
There remains no legal basis for terminating our grant award and clawing back funds that were already disbursed in our bank accounts.
Climate united
Nonprofit organizations that were set to administer the funds and award them to individual projects argued that Congress had mandated the money be paid out to them and that the EPA could not rescind the funds.
EPA officials said last week they plan to continue their appeal and will take the issue to the U.S. Supreme Court.
“Despite efforts to harm the (project) 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,” officials with Climate United, one of the organizations created to make individual project grants, said in a statement.
The green bank money has been in limbo since March, when the EPA began blocking grants from the Greenhouse Gas Reduction Fund. A month later, a federal judge issued an injunction against the EPA’s efforts to block the money from being distributed. The grant process was then put on hold after the EPA appealed the judge’s decision.
The appeals court’s latest ruling is viewed as a significant legal victory for the green bank nonprofits. However, the combination of canceled grants and the ongoing legal battle has taken a huge toll.
While much of the fund’s money was specifically for financing projects, nonprofits can also use a portion for certain expenses, such as payroll. With the money tied up, some organizations have struggled to pay employees.
Some nonprofits have been forced to lay off staff. Beth Bafford, CEO of Climate United, left the organization in March and has not yet been replaced. The money will remain frozen while the case goes to the U.S. Supreme Court.
