A US Court of Appeals preserves Biden-era climate policies after ruling that the Trump administration likely acted unlawfully in attempting to cancel a $20 billion clean energy grant program established under the Inflation Reduction Act (IRA). The decision, delivered by the U.S. Court of Appeals for the District of Columbia, temporarily protects funding from the Greenhouse Gas Reduction Fund (GGRF), a landmark initiative created to finance clean energy projects, energy-efficient buildings, and sustainable infrastructure across the United States.

While the ruling restores legal protections for the grants, the funds will remain temporarily frozen as the Environmental Protection Agency (EPA) considers appealing the decision to the U.S. Supreme Court.

<img class="aligncenter wp-image-88156 size-full" src="https://sigmaearth.com/wp-content/uploads/2026/08/Indias-Climate-Progress-720-x-480-px-1200-x-628-px-1080-x-1080-px-Website-2026-08-05T135925.824.png" alt="U.S. Court of Appeals preserves Biden-era climate policies” width=”1366″ height=”768″ />

Appeals Court Challenges EPA’s Decision

The legal dispute centers on the Greenhouse Gas Reduction Fund, commonly known as the “green bank,” which was created by Congress through former President Joe Biden’s Inflation Reduction Act of 2022.

The program allocates federal funding to nonprofit organizations that provide loans and investments for clean energy initiatives, including renewable energy projects, energy-efficient buildings, and community-based climate solutions.

The full appeals court overturned an earlier ruling by a three-judge panel, concluding that the EPA’s attempt to terminate the grants appeared to be driven primarily by policy disagreements rather than legal justification.

Key Facts About the Case

The court also noted that the EPA failed to provide adequate assurances that the allocated funds would remain protected if the injunction were lifted.

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Why the EPA Tried to Cancel the Program

EPA Administrator Lee Zeldin has argued that the grant program no longer aligns with the agency’s priorities.

• The EPA alleged that the fund represented government waste and claimed there were concerns involving fraud, mismanagement, and improper use of taxpayer money.
• Officials also criticized the decision to distribute the funding through a small number of nonprofit organizations responsible for financing local climate projects.
• However, the nonprofit recipients, including Climate United Fund and the Coalition for Green Capital, strongly denied any wrongdoing.
•  They argued that Congress had already approved the funding and accused the administration of attempting to dismantle the program because of political opposition to its climate objectives rather than evidence of misconduct.

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Court Finds Likely Violation of Federal Law

The US Court of Appeals preserves Biden-era climate policies, ruling that the EPA’s effort to terminate the grants and recover previously approved funding likely violated the Inflation Reduction Act.

• The appeals court agreed with an earlier decision by U.S. District Judge Tanya Chutkan, who found that the agency had failed to provide sufficient legal justification for cancelling the grants.
• Judge Chutkan also warned that the executive branch risked infringing upon Congress’s constitutional authority to appropriate federal spending.

Although the decision favors the nonprofit organizations, the court temporarily paused the release of funds to allow the EPA time to seek intervention from the U.S. Supreme Court.

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Broader Implications for U.S. Climate Policy

The case has become one of the most significant legal battles over the future of U.S. climate policy. Since returning to office, President Donald Trump has sought to roll back several environmental regulations, expand domestic fossil fuel production, and reverse many clean energy initiatives introduced during the Biden administration.

Legal experts say the outcome of this dispute could influence how future administrations interpret congressional authority over climate funding and determine the stability of long-term clean energy investments. For now, the appeals court’s ruling reinforces the legal protections surrounding one of the nation’s largest climate financing programs while the broader legal challenge continues.

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