Court Unfreezes Greenhouse Gas Reduction Fund, But Deployment Capacity Is Waning
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An appeals court ruled the EPA cannot claw back billions in climate funding, yet staffing cuts at key nonprofits threaten the program's execution.
A U.S. Circuit Court of Appeals for the District of Columbia Circuit ruling on Tuesday has granted eight nonprofit groups access to billions of dollars previously frozen by the Trump administration, as TechCrunch first reported. The court found that EPA Administrator Lee Zeldin, the FBI, and the Treasury Department lacked the authority to order Citibank to freeze accounts in February 2025 for funds already disbursed.
According to TechCrunch, the funding was part of the $20 billion Greenhouse Gas Reduction Fund created by the Inflation Reduction Act (IRA). The program was designed to establish debt facilities to help communities and businesses transition away from fossil fuels. While the EPA argued that the One Big Beautiful Bill Act (OBBBA) repealed the IRA's fund, the court ruled that the government cannot use new laws to claw back money already obligated and sent to nonprofits.
However, the victory may not translate to immediate deployment. Reporting from The New York Times indicates that the freeze caused severe operational damage: Power Forward Communities is down to two employees, and Climate United has not replaced its CEO who departed in March. Other organizations have implemented significant layoffs and budget cuts.
The EPA has seven days to decide if it will appeal the decision to the U.S. Supreme Court.