A US federal appeals court has ruled against the Environmental Protection Agency’s (EPA) attempt to cancel a multibillion-dollar clean energy grant program established under former President Joe Biden. The full US Court of Appeals for the District of Columbia decided on Tuesday, August 4, 2026, that the EPA cannot freeze roughly $20 billion in grants awarded to nonprofit groups for clean energy projects, reversing an earlier decision by the same court.

At the center of the dispute is the Greenhouse Gas Reduction Fund, a program created by Congress through Biden’s 2022 Inflation Reduction Act. The fund was designed to provide federal money to nonprofit organizations that would then issue loans and invest in small energy projects, energy-efficient buildings, and clean-energy infrastructure.

EPA Administrator Lee Zeldin, appointed during the Trump administration, sought to dismantle the program, claiming it did not align with the agency’s priorities and accusing grant recipients of fraud, waste, and mismanagement. Zeldin stated, “Shockingly, roughly $20bn of your tax dollars were parked at an outside financial institution by the Biden EPA. 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 organizations receiving the grants, including the Climate United Fund and Coalition for Green Capital, denied any wrongdoing and filed a lawsuit. They argued that the administration was illegally withholding funds already approved by Congress and attempting to kill the program due to opposition to its climate goals rather than evidence of fraud.

The majority of judges ruled that the EPA’s attempt to terminate the grants and claw back the money “based solely on a policy disagreement” likely violated the Inflation Reduction Act. The ruling has been temporarily stayed to allow the EPA time to seek intervention from the US Supreme Court.

Sources

Al Jazeera