Court Says EPA Likely Violated Law in Ending $20B Green Bank Grants

The full U.S. Court of Appeals for the District of Columbia found the EPA likely violated the law when it ended grants for the Greenhouse Gas Reduction Fund, a $20 billion "green bank" created under the Inflation Reduction Act. Six of 10 judges sided with a lower court, saying the agency's actions contradicted congressional intent. The decision, which favors nonprofits like Climate United Fund, is temporarily paused to allow the EPA to seek Supreme Court review.

EPA Administrator Lee Zeldin had accused the groups of mismanagement and potential fraud, freezing funds in a Citibank account. The nonprofits denied wrongdoing, arguing the administration lacked legal basis to terminate grants. Climate United Fund said there remains no legal basis for clawing back disbursed funds.

The ruling reverses a September panel decision that gave the administration broad cancellation power. U.S. District Judge Tanya Chutkan had previously noted the agency provided no fraud evidence. The EPA did not immediately comment.