Why It Matters
Two federal court rulings this week have blocked the Trump administration’s attempt to terminate billions of dollars in climate and clean energy funding distributed to nonprofits and cities. The decisions represent a significant legal setback for the Environmental Protection Agency’s effort to reverse grant programs established under Former President Joe Biden, and they raise the prospect of a Supreme Court battle over executive authority and congressional appropriations.
What Happened
A federal appeals court ruled Tuesday that the EPA cannot terminate $20 billion in clean energy grants awarded to nonprofit organizations. The same day, the U.S. Court of Appeals for the District of Columbia issued a divided decision restoring an injunction against EPA Administrator Lee Zeldin’s decision to withdraw the Biden-era grants.
The ruling followed a separate decision by U.S. District Judge Richard Mark Gergel on Monday, who ordered the EPA to reinstate $1.6 billion in climate justice grants. Judge Gergel had previously determined in June that the EPA illegally terminated the Environmental and Climate Justice Program. Two weeks before Monday’s ruling, he had ordered the EPA to restore the program with a deadline of September 30.
The lawsuits were led by The Sustainability Institute, a South Carolina nonprofit, and included 11 nonprofits and six cities as plaintiffs: Baltimore; Columbus, Ohio; Madison, Wisconsin; Nashville, Tennessee; New Haven, Connecticut; and San Diego.
The EPA has been given one week to file an appeal to the Supreme Court. Earlier, EPA Associate Deputy Administrator Travis Voyles had filed a motion Friday requesting a halt to the court order while the agency appeals to the 4th U.S. Circuit Court of Appeals.
By the Numbers
$20 billion — Clean energy grants blocked from termination by federal appeals court
$1.6 billion — Climate justice grants ordered restored by federal district judge
Nearly $3 billion — Total amount Congress allocated to the EPA for the Environmental and Climate Justice Block Grant Program through the Inflation Reduction Act
11 — Number of nonprofits named as plaintiffs in the lawsuit
6 — Number of cities involved in the legal challenge
Zoom Out
The court decisions reflect broader tension between the Trump administration’s agenda to roll back climate-related spending and congressional appropriations made during the Biden years. The Inflation Reduction Act, passed in 2022, directed nearly $3 billion specifically to environmental and climate justice initiatives, binding those funds to EPA distribution. Courts in multiple jurisdictions have now concluded that the EPA lacks unilateral authority to cancel grants once Congress has appropriated the money and commitments have been made to recipients.
Legal challenges to executive reversals of predecessor spending have become more common, with courts increasingly scrutinizing whether agencies can simply halt programs without following administrative procedure requirements or exceeding their statutory authority. The divided nature of Tuesday’s appeals court decision suggests the legal ground may shift depending on how the Supreme Court frames the question of executive power versus congressional intent.
What’s Next
The EPA has until next week to decide whether to appeal the appellate ruling to the Supreme Court. If the agency proceeds, the Court would face a decision about whether to accept the case and, if so, whether to side with the administration’s view of executive power or the lower courts’ interpretation of congressional appropriations law. The September 30 deadline set by Judge Gergel for grant reinstatement could face further litigation if the EPA pursues appeals. The outcome may determine not only the fate of these specific climate programs but also the scope of executive authority to rescind spending Congress has already allocated.