US court deals blow to Trump’s bid to scrap climate grant programme

Summary

A United States federal appeals court has ruled that the Trump administration likely broke the law when it tried to cancel a multibillion-dollar clean energy programme, dealing a blow to the president’s broader push to dismantle Biden-era climate policies. The full US Court of Appeals for the District of Columbia ruled on Tuesday that the Environmental Protection Agency (EPA) cannot freeze roughly $20bn in grants awarded to nonprofit groups for clean energy projects, reversing an earlier decision by the same court. But the money will not be released immediately. The ruling has been temporarily put on hold to give the EPA time to ask the US Supreme Court to intervene. At the centre of the dispute is the Greenhouse Gas Reduction Fund, a programme created by Congress through former US President Joe Biden’s 2022 Inflation Reduction Act. The programme, often referred to as a “green bank”, was designed to give federal money to nonprofit organisations that would give out loans and invest in small energy projects, energy-efficient buildings and clean-energy infrastructure. EPA Administrator Lee Zeldin has been trying to dismantle the programme, saying it doesn’t align with his agency’s priorities and accusing its recipients of fraud, waste and mismanagement. The organisations, which included the Climate United Fund, Coalition for Green Capital and three others, denied any wrongdoing and sued, arguing the administration was illegally withholding money already approved by Congress and attempting to kill the programme because it opposed its climate goals, not because of evidence of fraud. The majority of judges said the EPA’s attempt to terminate the grants and claw back the money “based solely on a policy disagreement” likely violated the Inflation Reduction Act. The ruling restores an order issued last year by US District Judge Tanya Chutkan, who found the EPA had failed to justify cancelling the grants and warned the administration was encroaching on Congress’s power to decide how federal money is spent.