The legal drama over the Trump Administration’s effort to freeze the Environmental Protection Agency’s $20-billion Greenhouse Gas Reduction Fund is taking another turn.
The fund, which was created by Congress during the Biden Administration as part of the Inflation Reduction Act, has been targeted by the Trump Administration in part because of its focus on funding climate justice programs and projects in underserved communities.
According to how the program was structured by Congress, 70% of the funds were supposed to go to low-income and otherwise disadvantaged communities. In September, a ruling was made in favor of the Trump Administration’s effort to can the program and reclaim $17 billion in unspent funds — but now an emergency appeal from the plaintiffs has been granted and the case will be heard in late February in front of a full panel of judges on the D.C. circuit of the U.S. Court of Appeals.
When that hearing takes place, it’ll be nearly a year since the saga started. On March 4, Trump’s EPA froze the funding for the so-called green bank program. Climate United, an organization which received nearly $7 billion from the fund in order to make grants to smaller community projects, sued the EPA just days later.
While there was a preliminary injunction granted against the EPA in April, a three-judge panel from the D.C. Circuit ruled 2-1 in September to have the lawsuit thrown out entirely. If that ruling stood, the EPA would also have been able to claw back $17 billion in unspent funds from Climate United and other organizations that received money from the program. The two judges who ruled in the EPA’s favor were both Trump appointees.
That the 2-1 ruling has now been vacated, however, which means that the lawsuit won’t be bumped into federal claims court, as the majority on that panel had suggested. The majority opinion in that ruling framed this as a small-bore issue, with Judge Neomi Rao writing, “claims of arbitrary grant termination are essentially contractual,” undercutting the argument that Trump’s EPA undermined the will of Congress by freezing the congressionally appropriated funds.
“Everyone deserves access to financing for clean energy projects that create good jobs, reduce pollution, and lower energy bills,” Beth Bafford, the CEO of Climate United, said in a statement. “For over nine months, EPA’s unlawful actions have prevented us from delivering clean, affordable energy to hardworking Americans across the country. We will continue to press forward on behalf of the communities we serve, and we look forward to the judges’ reconsideration of our case so we can get back to work.”
The $17 billion that remains in legal limbo will continue to be frozen while the case continues to work its way through the court.
