The full U.S. Court of Appeals for the D.C. Circuit restored a preliminary injunction barring the Environmental Protection Agency from carrying out its attempt to terminate roughly $20 billion in clean-energy grants and reclaim money already disbursed into recipients’ bank accounts. The ruling is a significant setback for the Trump administration’s effort to undo awards made under the Biden-era Greenhouse Gas Reduction Fund (GGRF). But the case is far from resolved.
What to Know
The grants for clean energy projects were awarded through the GGRF created in the 2022 Inflation Reduction Act (IRA), one of the Biden Administration’s signature achievements. Shortly after taking office, President Donald Trump targeted Biden’s climate efforts with an executive order pausing the federal government’s disbursement of funds under the IRA.
The EPA plans to appeal the decision to the U.S. Supreme Court and sought an administrative stay until those proceedings are completed. On Aug. 7, the court granted the motion for an administrative stay, which effectively freezes the funds until Nov. 9. If the Supreme Court agrees to review the injunction, the stay would be extended until the court has disposed of the case.
EPA Administrator Terminates Grants
Trump-appointed EPA Administrator Lee Zeldin terminated the GGRF climate grants in March of 2025 and sought to claw back funds already disbursed into bank accounts on behalf of grant recipients. The notice of termination cited “substantial concerns regarding program integrity, the award process, programmatic fraud, waste and abuse, and misalignment with the Agency’s priorities.”
The Climate United Fund and other organizations that received grant awards filed a lawsuit challenging the GGRF’s termination. In April of 2025, the district court issued a preliminary injunction barring the EPA and Citibank from giving effect to the termination notices while litigation was pending and requiring Citibank to disburse the grant funds. However, the D.C. Circuit issued a partial administrative stay that kept Citibank from disbursing the funds while the injunction was appealed. Citibank served as a financial agent for the purposes of implementing the GGRF.
OBBBA Complicated the Appeal
The EPA and Citibank appealed the district court’s preliminary injunction to the U.S. Court of Appeals for the District of Columbia Circuit. Complicating that court’s review of the matter was the fact that the GGRF was repealed by the One Big Beautiful Bill Act (OBBBA) a few months after the district court injunction was issued. The OBBBA was enacted in July of 2025 and said that Section 60103 of the IRA “is repealed and the unobligated balances of amounts made available to carry out that section (as in effect on the day before the enactment of this Act) are rescinded.”
In September of 2025, a three-judge panel from that court set aside the preliminary injunction, finding that it was unlikely the plaintiffs would succeed on the merits and that the district court lacked jurisdiction. It said the case should have been filed in the U.S. Court of Federal Claims. The D.C. Circuit granted the plaintiff’s petition to have the case reheard en banc in December of 2025.
En Banc Court Upholds Injunction
The D.C. Circuit issued a three-page per curiam judgment on August 4 reversing the ruling by the three-judge panel and upholding the District Court’s injunction in its entirety. It did not address the issue of jurisdiction in the judgment. Six of the ten judges concluded:
- The EPA’s attempt to terminate the GGRF’s grants and claw back funds already disbursed into the plaintiffs’ bank accounts based only on a policy disagreement regarding Section 60103 of the IRA likely violates a mandatory Congressional appropriation.
- The EPA has not shown that it would not take those steps if the court lifted the preliminary injunction.
However, the en banc D.C. Circuit split 5-5 on whether the OBBBA affects the applicability of Section 60103. Five judges determined that the repeal of Section 60103 is unlikely to affect the applicability of grant funds obligated and disbursed by the time the OBBBA was enacted. Four judges found the EPA could terminate GGRF grants without violating the IRA. One judge found that, due to the rescinding of Section 60103’s dedicated administrative funds, the EPA can’t be required to spend additional discretionary funds to continue administering the grants going forward.
The Takeaway
The D.C. Circuit’s ruling restores a significant legal barrier to the EPA’s effort to cancel the GGRF awards. But with the funds still unavailable and the Trump administration preparing to seek Supreme Court review, the fate of the $20 billion program and the clean-energy projects it was intended to support remains unresolved.
