A federal appeals court on Tuesday ruled against the Environmental Protection Agency’s attempt to block the distribution of $20 billion in climate grant funding, delivering a significant victory to a group of nonprofit organizations that have been unable to access the funds for over a year.
In a split 10-judge decision, the U.S. Court of Appeals for the District of Columbia Circuit upheld a lower court’s injunction preventing the EPA from terminating the grants awarded under the Biden administration’s Greenhouse Gas Reduction Fund. The initiative functions as a “green bank,” providing low-cost loans and investments to support renewable energy projects and other climate programs. The ruling means the nonprofits can use the funds as the legal battle continues, unless the EPA appeals to the Supreme Court within seven days and seeks to maintain the freeze.
The EPA, represented by spokeswoman Brigit Hirsch, is currently reviewing the ruling and weighing its next steps, including a possible Supreme Court appeal. The agency had previously argued that the grant program was exposed to potential waste, fraud, and abuse, citing a report by the conservative watchdog Project Veritas. The video, which showed a former EPA employee comparing the prior administration’s spending to throwing “gold bars” off the Titanic, prompted investigations by the EPA’s inspector general, the Justice Department, and the FBI. None of these inquiries found enough evidence to justify canceling the grants.
The case traces back to February, when EPA Administrator Lee Zeldin sought to claw back the grants awarded to eight nonprofits. The recipients of the funding promptly challenged the agency in court, arguing that the cancellation was unlawful. In April 2025, U.S. District Judge Tanya Chutkan issued a preliminary injunction barring the EPA from revoking the grants, allowing the groups to begin accessing the funds pending a final decision. However, the EPA appealed, and the case has since remained unresolved.
Legal experts note the ruling marks a critical turning point, potentially ending what one called a “deep freeze” on the grants. The prolonged delay has had substantial consequences for the nonprofits involved, many of which relied on the funds to cover payroll and operational expenses. Some organizations, such as Power Forward Communities—which had been awarded $2 billion—were reportedly reduced to skeleton staffing earlier this year. Others, including Climate United, have seen executive departures amid the ongoing uncertainty.
The participating nonprofits welcomed Tuesday’s decision. Climate United characterized the EPA’s prior actions as “unlawful” attempts to dismantle the grant program, condemning what it described as “false allegations and misinformation.” Representatives from Justice Climate Fund and the Coalition for Green Capital also expressed optimism about resuming their initiatives with restored access to the funding.
Should the EPA choose not to appeal to the Supreme Court, the litigation will advance in federal district court, allowing the grant recipients to utilize the awards while the case unfolds.