A federal appeals court ruled on Tuesday that the Trump administration improperly terminated a multibillion-dollar fund designed to support clean energy initiatives, delivering a legal victory to several nonprofits selected to manage the Biden administration’s climate program. The decision by the full U.S. Court of Appeals for the District of Columbia Circuit was issued by a divided panel.

The case centers on the Greenhouse Gas Reduction Fund, a $20 billion program authorized by Congress intended to provide financing to nonprofits that in turn invest in small-scale clean energy projects, energy-efficient construction, and sustainable transportation. The initiative, often described as a “green bank,” aims to help reduce greenhouse gas emissions by supporting early-stage ventures and infrastructure upgrades in the energy sector.

Under the Trump administration, efforts were made to halt the disbursement of the funds, effectively disrupting the program before it could be fully implemented. The groups designated to administer the fund challenged this move in court, contending that the administration’s actions violated constitutional provisions by refusing to obligate funds explicitly appropriated by Congress.

Though the ruling favored Climate United Fund and other nonprofit organizations, the court’s decision will not result in immediate access to the funding. The appeals court has paused the order for several days, permitting the Environmental Protection Agency (EPA) an opportunity to seek further review from the U.S. Supreme Court.

The legal dispute highlights ongoing tensions between the previous administration’s regulatory rollback measures and the Biden administration’s climate agenda. The Greenhouse Gas Reduction Fund is a cornerstone of President Joe Biden’s policy framework to curb climate change by promoting clean energy and sustainable development.

The Trump administration argued that it had discretion over the timing and implementation of the fund, while the nonprofits maintained that Congress had clearly mandated the allocation of these resources. The appellate judgment implicitly rejects the administration’s position, emphasizing the obligation to utilize congressional appropriations for climate-related investments.

As the EPA considers its next steps, the outcome of any Supreme Court intervention could have significant implications for federal authority over climate financing and the broader trajectory of U.S. clean energy policy.