The U.S. Court of Appeals for the District of the Columbia Circuit, in a 2-1 vote on Sept. 2, ruled a lower court lacked jurisdiction to hear a case brought by non-profit groups awarded $20 billion in grants under the prior administration’s Greenhouse Gas Reduction Fund Program (GGRFP).
The GGRFP was established as part of the 2022 Inflation Reduction Act to reduce greenhouse gas emissions. It The was geared specifically toward low-income communities to fund projects that would lower energy costs and pollution for those most at risk of harm from pollution.
The GGRFP created three separate grant programs:
The National Clean Investment Fund (NCIF): $14 billion was awarded to nonprofits to act as national “green banks” to provide loans and loan guarantees to finance clean energy projects across the United States and further required that 50-to-75 percent of this funding be specifically for low-income communities.
The Clean Communities Investment Accelerator (CCIA): $6billion was awarded to nonprofit community lenders to provide sub grants to credit unions and other community-based lenders, all in low-income communities to provide clean energy financing.
Solar For All: $7 billion was awarded to this program to fund community solar projects in lower-income communities, with the aim to help lower energy costs, among other benefits.
The funds were held by Citibank and were subsequently frozen, after the EPA made claims earlier this year regarding potential mismanagement of funds. Several recipients of the grants then sued Citibank and EPA in March 2025 after the funds were frozen, alleging that these actions violated the Administrative Procedure Act.
Recipients argued that termination of the grant agreements requires “credible evidence of the commission of a violation of Federal criminal law involving fraud, conflict of interest, bribery, or gratuity violations” and further, that the EPA failed to take required procedural steps to terminate a grant agreement, including providing written notice of the termination with the “the reasons for termination, the effective date, and the portion of the federal award to be terminated, if applicable.”
Judge Tanya Chutkan of the U.S. District Court for the District of Columbia then issued a preliminary injunction requiring Citibank to release the funds, citing that the EPA had not offered any evidence to establish their basis for termination and failed to follow proper procedures. This preliminary injunction was then appealed and argued in May 2025 before a panel of three judges.
The Appellate Court overturned the preliminary injunction. The court held the case was contractual in nature and that it belonged before the Court of Federal Claims, which hears cases involving monetary claims against the government.
While the court did acknowledge that the lower court had jurisdiction to hear claims that the EPA violated the constitution, it held that the EPA’s action in the instant matter was not unconstitutional as nothing in the law limited the EPA’s discretion to withhold or terminate the grants when it withheld the grants. However. the dissent labeled the actions taken against the grants as an “unlawful nullification of Congress’s duly enacted policy.”
Based on this recent ruling, the future of the Greenhouse Gas Reduction Fund and its projects remain uncertain.
The court’s full opinion regarding the preliminary injunction can be found here.