The full US Court of Appeals for the District of Columbia ruled on Tuesday, August 4, 2026, that the Environmental Protection Agency likely acted unlawfully when it terminated roughly $20bn in clean-energy grants. The decision restores an earlier order protecting the programme, but the money will not be released immediately.
The ruling is a setback for President Donald Trump’s effort to dismantle Biden-era climate policies. The court has temporarily put its decision on hold while the EPA considers asking the US Supreme Court to intervene, leaving nonprofit grant recipients without immediate access to the funds.
At a glance:
- The disputed programme is the Greenhouse Gas Reduction Fund, created by Congress through the 2022 Inflation Reduction Act.
- The fund was designed to support loans and investments in small energy projects, efficient buildings and clean-energy infrastructure.
- EPA Administrator Lee Zeldin said the programme involved waste, mismanagement and possible fraud; recipient organisations denied wrongdoing.
- Six of the 10 participating judges concluded that terminating the grants based on a policy disagreement likely violated federal law.
| Before the August 4 ruling | After the August 4 ruling | |
|---|---|---|
| EPA action | Grants were frozen and later terminated under Administrator Lee Zeldin. | The termination is blocked while the case continues. |
| Recipients’ access | Nonprofits could not access the disputed funds. | Access is not restored immediately because the ruling is temporarily stayed. |
| Legal position | A three-judge panel had sided with the administration in September 2025. | The full appeals court reversed that outcome and revived protections ordered by a district judge. |
What the court decided
The en banc appeals court reversed a September 2025 decision by a three-judge panel of the same court. Six of the 10 participating judges agreed that the EPA likely violated the Inflation Reduction Act by terminating the grants and attempting to recover funds because the administration disagreed with the programme’s climate policy goals.
The court restored an order issued by US District Judge Tanya Chutkan, who had found that the EPA failed to justify cancelling the grants and was encroaching on Congress’s authority to decide how federal money should be spent. The appellate ruling is preliminary, so it does not finally resolve every issue in the case.
Why the $20bn fund matters
The Greenhouse Gas Reduction Fund was established through President Joe Biden’s 2022 Inflation Reduction Act. Often called a green bank, it awarded federal money to nonprofit organisations that were expected to provide loans and other financing for small clean-energy projects, energy-efficient buildings and related infrastructure.
The organisations involved include Climate United Fund and the Coalition for Green Capital. The programme’s structure placed awarded funds in a Citibank account for distribution, while recipients said the money had already been approved by Congress and that the administration was unlawfully withholding it.
What happens next
The ruling does not mean the nonprofits can begin spending the money at once. The court temporarily paused its effect to give the EPA time to seek Supreme Court review, and the administration has argued that later legislation repealed part of the law establishing the fund and rescinded money that had not already been obligated.
The Trump administration has accused the grant recipients of waste, conflicts of interest, weak oversight and possible fraud. The organisations denied wrongdoing and argued that the EPA’s reasons shifted from allegations of fraud to broader objections about oversight and policy. The Supreme Court’s response could determine whether the grants remain protected.
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