In a pivotal legal decision, the D.C. Circuit Court of Appeals ruled Wednesday that the Environmental Protection Agency (EPA), under Trump-appointed leadership, may end its obligation to continue distributing roughly $16 billion in climate-focused grants. These funds, part of the Greenhouse Gas Reduction Fund, were initially approved under Biden-era climate legislation.
The court’s majority held that disputes over grant termination fall under contractual jurisdiction and must be handled in the U.S. Court of Federal Claims, not federal district courts. This overturns a previous injunction that had prevented the EPA from halting the funding process.
Judges Neomi Rao and Gregory Katsas backed the government’s authority to oversee and retract grants as part of its stewardship responsibilities. However, Judge Nina Pillard dissented sharply, warning the decision undermines congressional intent and the purpose of climate investments.
Environmental nonprofit groups affected by the freeze—including Climate United Fund—are planning to pursue their case in the Contract Claims court, while clean-energy projects remain stalled until a resolution is reached.