A federal appeals court has ruled that the Environmental Protection Agency (EPA) may reclaim $20 billion in grants from the Greenhouse Gas Reduction Fund, the national "green bank" created under former President Joe Biden's 2022 climate law. The grants, which have been under contract since August 2024 and held at Citibank, were declared void by EPA in March.

The three-judge panel of the U.S. Court of Appeals for the D.C. Circuit said the nonprofit grantees challenging the termination of their awards "are not likely to succeed on the merits" because their claims are primarily contractual. The court also barred EPA from withdrawing funds for one week after the ruling to allow plaintiffs to petition for further appeal.

The decision overturns an earlier injunction by a district court and directs that disputes over the grants be handled by the U.S. Court of Federal Claims, which can award damages but cannot force the agency to continue the program.

The Greenhouse Gas Reduction Fund was intended to expand lending in renewable energy, electric transportation, and other clean energy initiatives. While some grant funds have already been spent, EPA estimates nearly $17 billion remains in Citibank accounts.

Plaintiffs, including Beth Bafford, CEO of Climate United Fund, and the nonprofit coalition Power Forward Communities, expressed disappointment but indicated they may appeal and continue to challenge the decision.

The ruling follows a Supreme Court precedent allowing the Trump administration to cancel certain NIH grants deemed objectionable, highlighting broader federal authority to rescind funding contracts even after awards have been made.

Source: eenews.net