Court Overturns U.S. EPA’s $20 Billion Decision

The U.S. Court of Appeals said Tuesday that the Donald Trump administration did not have the authority to cancel and reclaim funds previously allocated to climate-focused nonprofit organizations. According to ixbt.com and The New York Times, eight nonprofits had sought to restore access to billions transferred to their bank accounts. Techcrunch.com reports this.

In February of this year, Citibank froze their accounts on the instructions of EPA Administrator Lee Zeldin, as well as the FBI and the Treasury Department. The ruling allows the organizations to access their funds until the EPA decides whether to appeal the decision to the U.S. Supreme Court.

Legal Basis of the Court’s Ruling

Six of the 10 judges on the panel of the U.S. Court of Appeals for the District of Columbia Circuit voted to uphold an injunction suspending the recovery of the funds. The judges said the EPA had attempted to seize the money solely because of “political disagreement,” making the action unlawful.

The disputed funds had been allocated to create the $20 billion Greenhouse Gas Reduction Fund, established under the Inflation Reduction Act (IRA) to promote clean energy development. Most of the money was intended to support lending mechanisms that would help businesses and communities move away from fossil fuels.

Challenges Faced by the Organizations

The Trump administration’s EPA argued that it had the authority to reclaim the funds because the newly enacted One Big Beautiful Bill Act (OBBBA) repealed the provision that created the Greenhouse Gas Reduction Fund program. However, the panel said the OBBBA could not justify reclaiming the money because it had already been committed and transferred to the organizations’ accounts.

Although the nonprofits welcomed the ruling, the step may have come too late for many of them. While their accounts were frozen, they were forced to make severe financial cuts. Climate United’s CEO resigned in March and has still not been replaced, while Power Forward Communities is down to just two employees.