Trump Administration Wins Case Over EPA $16B Climate Grant Cuts/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ A U.S. appeals court has ruled in favor of the Trump administration, allowing the EPA to terminate $16 billion in climate-related grants. The decision reverses a lower court order and shifts the dispute to a specialized federal claims court. Environmental nonprofits say the ruling disrupts critical climate financing efforts.
Climate Grant Cuts Quick Looks
- Appeals court overturns block on Trump EPA’s grant terminations
- $16 billion in Biden-era climate grants now halted
- Nonprofits sued EPA, Citibank, and Administrator Lee Zeldin
- Court says contractual disputes must go to federal claims court
- Decision a major legal win for Trump’s environmental rollback
- Green bank funds aimed to support climate-friendly projects
- Environmental groups call freeze devastating to operations
- Court rules district courts lack jurisdiction in such cases
- Biden-era climate funding faces further political and legal hurdles
- Ruling underscores limits of judicial oversight in federal grant disputes
Deep Look
U.S. Court Approves Trump EPA’s Termination of $16 Billion in Climate Grants
WASHINGTON — In a significant legal victory for the Trump administration, a federal appeals court has ruled that the Environmental Protection Agency (EPA) was within its rights to freeze and terminate over $16 billion in climate-focused grants that were issued under President Joe Biden’s administration.
The ruling, issued Tuesday by a 2-1 panel of the U.S. Court of Appeals for the District of Columbia Circuit, effectively reverses a previous decision by a lower court that had temporarily blocked the Trump-led EPA from pulling the funds. The grants were awarded to a group of nonprofits under the Biden administration’s climate legislation to support a “green bank” — a program designed to finance environmentally sustainable projects aimed at cutting greenhouse gas emissions.
Appeals Court: No Jurisdiction for District Courts
According to the majority opinion, district courts do not have the authority to rule on disputes related to terminated federal grants. Instead, the panel stated that such disagreements belong in the U.S. Court of Federal Claims, which specializes in contractual disputes involving the federal government.
“In sum, district courts have no jurisdiction to hear claims that the federal government terminated a grant agreement arbitrarily or with impunity,” the panel wrote. “Claims of arbitrary grant termination are essentially contractual.”
This jurisdictional issue proved fatal for the plaintiffs — a coalition of five nonprofits, including the Climate United Fund — who argued that the EPA, Administrator Lee Zeldin, and Citibank illegally denied access to funding already awarded to them under the Biden-era program.
Nonprofits: “Paralyzed” by Grant Freeze
The nonprofit groups, which were tasked with administering the green bank initiative, claimed that the sudden revocation of funds had not only halted their environmental initiatives but also placed their operations in financial jeopardy.
In their lawsuit, they sought reinstatement of access to the grant money, alleging that the freeze had paralyzed their efforts to launch or sustain projects aimed at decarbonization, energy efficiency, and climate resilience, particularly in underserved communities.
Citibank, which held the funds in escrow pending disbursement, was also named as a defendant in the case.
A Political and Legal Win for Trump’s Environmental Agenda
The court ruling is a notable success for the Trump administration, which has criticized the green bank initiative and other Biden climate programs as wasteful and ideologically driven. President Donald Trump and EPA Administrator Lee Zeldin have consistently advocated for eliminating what they characterize as bloated environmental spending in favor of fossil fuel expansion and deregulation.
The administration’s argument — that the government must maintain flexibility in awarding and revoking grants based on national priorities — resonated with the appeals court majority. The dissenting judge, however, voiced concern about the lack of legal recourse for groups affected by politically motivated funding decisions.
Legal Future of Climate Grants Remains Uncertain
For the nonprofits involved, the fight may not be over. The appeals court did not rule on the merits of the EPA’s actions, only the jurisdiction of the district court. That means the groups may refile their claims in the U.S. Court of Federal Claims, though such cases often face longer timelines and more complex procedures.
Meanwhile, the $16 billion in grants — originally earmarked to kickstart private-sector investment in climate-related infrastructure and clean energy — remain in limbo.
This development also raises broader questions about the stability of federal climate funding in an era of sharp political division. With Trump seeking a return to the White House and climate policy becoming a central partisan issue, long-term commitments to environmental investment face ongoing legal and policy uncertainty.
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