The U.S. Court of Appeals for the D.C. Circuit has vacated an injunction that required the Environmental Protection Agency (EPA) to continue disbursing Greenhouse Gas Reduction Fund grants, thereby affirming the agency's authority to cancel these awards. This decision was outlined in a judicial opinion.
The Greenhouse Gas Reduction Fund was established by the Inflation Reduction Act of 2022 with a budget of $27 billion aimed at financing clean energy and emissions reduction initiatives. The program sought to support nonprofit lenders capable of leveraging private capital. In 2024, the EPA allocated $20 billion to five recipients before suspending the funds.
According to reports, EPA awards from the Greenhouse Gas Reduction Fund included $6.97 billion to Climate United Fund, $5 billion to the Coalition for Green Capital, and $2 billion to Power Forward Communities. Citibank froze over $16 billion in accounts in early 2025 following oversight referrals, which led to a legal challenge addressed by the D.C. Circuit ruling.
EPA Administrator Lee Zeldin expressed concerns about fraud, waste, abuse, and program integrity as reasons for terminating the grants from the fund. Investigations into the fund’s disbursement are reportedly involving entities such as the Department of Justice (DOJ), Federal Bureau of Investigation (FBI), and EPA Inspector General. Approximately $3 billion had already been disbursed before halting the program.
The U.S. Court of Appeals for the D.C. Circuit is recognized as one of the most influential federal appellate courts due to its jurisdiction over agency and regulatory cases, often shaping national administrative law. In this instance, it determined that grant disputes should be handled by the U.S. Court of Federal Claims under the Tucker Act.
