Overview
- A divided U.S. Court of Appeals in Washington, D.C. restored an April 2025 injunction that prevents the EPA from freezing or clawing back roughly $20 billion in grants awarded from the Greenhouse Gas Reduction Fund.
- The court's majority said the EPA's attempt to terminate awards 'based solely on a policy disagreement' likely breached the Inflation Reduction Act and noted the agency gave no assurance it would not seek further clawbacks.
- The EPA said it is reviewing the decision and could ask the U.S. Supreme Court to weigh in, so the dispute over the grants is not yet finally resolved.
- The funds are custodied at Citibank and were awarded to named entities including the Climate United Fund, Coalition for Green Capital and state-sponsored programs that target clean-energy projects in underserved communities.
- The case turns on both procedure and statute: judges were split over whether plaintiffs should have sued in the Court of Federal Claims and whether a later repeal in the One Big Beautiful Bill Act voids the original grant authority, a division that keeps legal uncertainty about control of the money.