Published On 2 Sep 2025
A United States appeals court has ruled that the administration of President Donald Trump can move forward with terminating more than $16bn in federal grants awarded to climate change nonprofits.
On Tuesday, the US Appeals Court for the District of Columbia voted, two to one, to overturn a lower court’s decision preventing the grants from being revoked.
Writing for the majority, Judge Neomi Rao, a Trump appointee, argued that the lower court did not have the power to offer a ruling in the case.
Instead, she wrote that the case should have gone to the Court of Federal Claims, dedicated to weighing contract and monetary disputes.
“District courts have no jurisdiction to hear claims that the federal government terminated a grant agreement arbitrarily or with impunity,” Rao wrote. “Claims of arbitrary grant termination are essentially contractual.”
District courts, she added, should be primarily focused on deciding constitutional matters or legal disputes.
Rao was joined in her decision by a fellow Trump appointee on the bench, Judge Gregory Katsas.
The one dissenting judge on the appeals court, Cornelia Pillard, was appointed by former President Barack Obama.
She argued that the rollback of the federal grants was a political action taken to reflect the Trump administration’s opposition to green-energy initiatives.
Pillard also pointed out that the federal funding was part of the Inflation Reduction Act, a law Congress passed in 2022 that included the single biggest investment in climate change initiatives in US history.
The Trump administration’s decision to nix the federal grants, Pillard wrote, was done “without presenting to any court any credible evidence or coherent reason that could justify its interference with plaintiffs’ money and its sabotage of Congress’s law”.
Tuesday’s lawsuit was the continuation of a lawsuit brought by five of the eight nonprofits that had been collectively awarded $20bn under the Inflation Reduction Act, a signature piece of legislation passed under former President Joe Biden.
That money had been earmarked for the Greenhouse Gas Reduction Fund, a programme to finance “green bank” projects designed to lessen air pollution, lower greenhouse gas emissions, and build clean-energy infrastructure.
In anticipation of their disbursement, the funding was kept at Citibank, a prominent US financial institution.
But in February, Lee Zeldin, Trump’s pick to lead the Environmental Protection Agency (EPA), posted a video on social media denouncing the funds as an example of government waste.
“Shockingly, roughly $20bn of your tax dollars were parked at an outside financial institution by the Biden EPA,” Zeldin said. “This pot of $20bn was awarded to just eight entities that were then responsible for doling out your money to NGOs and others at their discretion.”
“The days of irresponsibly shovelling boatloads of cash to far-left activist groups in the name of environmental justice and climate equity are over,” he added.
By March, Zeldin had called on the EPA’s inspector general to review the Greenhouse Gas Reduction Fund, and the disbursement of its funds was frozen.
The Climate United Fund has been among the five groups fighting for access to their portion of the funds, worth approximately $16m.
Other plaintiffs include the Coalition for Green Capital, Power Forward Communities, Inclusiv and the Justice Climate Fund.
In a statement after Tuesday’s ruling, the Climate United Fund reaffirmed its perspective that the Trump administration “broke the law” by clawing back the funds.
“While we are disappointed by the panel’s decision, we stand firm on the merits of our case: EPA unlawfully froze and terminated funds that were legally obligated and disbursed,” its CEO, Beth Bafford, said.
“This is not the end of our road,” she added.
Tuesday’s appeals court ruling overturned a lower-court decision from Judge Tanya Chutkan, an Obama appointee.
On April 15, she granted a preliminary injunction against Zeldin’s decision, barring Trump’s EPA from clawing back the $20bn and calling on Citibank to release the funds.
She pointed out that the EPA “gave no legal justification for the termination” and that the decision to axe the funds threatened Congress’s authority over spending decisions.
But Rao, the appeals court judge, said in Tuesday’s decision that no law limited Zeldin’s decision to nix the grants.
https://www.aljazeera.com/news/2025/9/2/us-appeals-court-allows-trump-to-peel-back-20bn-in-clean-energy-grants?traffic_source=rss
