For a year and half, $17 billion intended to help stem the tide of climate change has been gathering dust in bank vaults.
But that might — emphasis on might — change soon.
The D.C. Circuit Court of Appeals on Tuesday eked out a fractured one-page ruling that in theory will let the recipients access their money again next week.
There’s a decent chance it doesn’t happen. EPA Administrator Lee Zeldin has promised to take his crusade to get the money back to the Supreme Court, which could swiftly step in and block access to the money again, at least temporarily.
Despite that risk, the long-starved grant recipients are hopeful that, after 18 months of shedding staff and mothballing deals amid the partisan feuding, this could be their big break. The appellate court’s ruling may provide a window of time in which they can make progress on plans to bring carbon-free energy to disadvantaged communities across the country — work that has largely halted under the Trump administration, thanks to its efforts to claw back funding from Democrats’ climate law and a broader assault on renewable energy and climate work.
“If the Supreme Court decides to stay out of it or affirms what the D.C. Circuit did, then I would imagine that there will be a few deals that they can update very quickly, and so you’ll see sort of an initial flurry of action,” said David Super, a law professor at Georgetown University Law Center.
The Department of Justice is widely expected to appeal Tuesday’s decision giving eight nonprofits access to award funds that have been frozen in accounts at Citibank since early last year. The appeals court’s majority affirmed a lower court’s injunction that prevented EPA from clawing back the funds on the grounds that it likely had no legal basis on which to terminate the grants or bar grantees from accessing them.
If the appellate decision is allowed to stand, the nonprofits chosen by the Biden administration to run its flagship “green bank” program could tap in to those funds as soon as Aug. 11, both for past expenses incurred and to make new deals and hire new staff while litigation in the case continues, the recipients said. U.S. District Court Judge Tanya Chutkan’s preliminary injunction, which the appeals court affirmed Tuesday, would make those funding decisions irreversible as long as they followed the rules laid out in the grant agreements.
That’s if the Supreme Court doesn’t intervene.
Legal gamble at the high court
The court has backed some of the Trump administration’s previous efforts to scuttle other grant awards. Twice last year, the high court said that grant terminations — in those cases, education and health research grants — are primarily breach of contract actions that should be heard by the Court of Federal Claims. The special tribunal, which can award only monetary damages and can’t order EPA to reverse course and run the grant program, is now reviewing claims made under the green bank’s sister program under the Inflation Reduction Act, known as Solar for All.
The so-called Greenhouse Gas Reduction Fund is that climate law’s biggest grant program, originally weighing in at $20 billion. Zeldin has staked substantial personal capital in painting it as rife with corruption and coordinating with DOJ and the Treasury Department to recover the funds.
If the Supreme Court reviews Tuesday’s decision in the “green bank” case, it could be a year or more before the groups see any money.
But there may be key differences between the grant cases that the high court has previously ruled on and this one. For one thing, the recipients aren’t asking for any new money from the U.S. Treasury. Their awards have already been disbursed, and they’re seeking access to them.
For another, said Super, “the administration’s posture here is an awkward one for the Supreme Court.”
The Department of Justice argues that the case is moot because Congress passed legislation last summer that rescinded all unobligated funds under the green bank initiative.
The grantees and their attorneys have argued that the only program funds that were unobligated when the president signed his Big Beautiful Bill Act on Independence Day 2025 were EPA’s tiny administrative budget.
The Trump administration’s attorneys have argued that EPA’s move to terminate the grants de-obligated billions in unspent award dollars, which were then rescinded. But Congress doesn’t state that clearly in the law, and Super said that even some of the Supreme Court’s conservative justices would be reluctant to do Congress’ work for it.
“I’m thinking of, in particular, Justice [Clarence] Thomas and Justice [Neil] Gorsuch, who are among the most adamant textualists on the court, and generally take the position that if Congress wrote a bad law, Congress needs to fix their law,” he said.
If the Supreme Court declines to hear an appeal, or if it sides with the appeals court, that could vindicate top career government attorneys who last year warned political leaders at EPA and DOJ that simply freezing the grants could have “significant legal vulnerabilities.” One veteran EPA lawyer even warned that federal claims court could award the GGRF grantees “potential multi-billion dollar damage claims” against the government for violating its own grants agreement.
‘Ready to get back to work’
As of Tuesday night, awardees were eyeing at least the possibility that award funds could flow soon — and perhaps even this fall, after the court returns from vacation. How they make use of that opportunity may vary from recipient to recipient.
“I do think it’s different for everybody,” said Dale Bryk, a senior attorney with the Environmental and Energy Law Program at Harvard Law School.
In April 2024, EPA awarded eight nonprofits grants ranging from $400 to nearly $7 billion to expand lending for renewable energy, electric transportation and net-zero buildings, especially in poorer neighborhoods.
Some of those recipients were new partnerships created by older institutions to compete for the Inflation Reduction Act dollars, with subrecipients like fledgling green banks or other nonprofits that relied on IRA dollars to build capacity. Other grantees existed before the IRA and have continued to operate since the freeze took effect.
Climate United, which received just under $7 billion, has shed most of its dedicated staff in the months since EPA initiated the freeze, including its CEO. Power Forward Communities, which was launched by Rewiring America and partners in 2023 and was awarded $2 million for electrification initiatives, has likewise seen extensive layoffs linked to its grant being terminated.
After the ruling Tuesday, Climate United told POLITICO that it was “ready to get back to work providing accessible financing to communities across the country.”
“While we have scaled back our staffing for Climate United Fund, Climate United’s coalition partners have continued to pursue investment strategies that align with GGRF goals, from solar to clean transportation to building decarbonization,” the group said. “Should access to funds be restored, the staff who are working on those strategies at our partner organizations would return their focus to the Climate United portfolio.”
Coalition for Green Capital, or CGC, the third recipient under the flagship “green bank” GGRF program with Climate United and Power Forward Communities, is in different position. It invested more than half of its original $5 billion EPA grant in early 2025, prior to the freeze. Its most recent annual report states that those disbursements — four with financial intermediaries and one with a reinsurance program — continued to deploy nearly $3 billion in climate law funds throughout last year, even as the Citibank accounts remained frozen. Much of the remaining $2 billion from CGC’s grant, which is frozen at Citibank, is earmarked for individual green banks across the country rather than CGC’s own workstreams.
