Judges Side with Trump EPA Over Canceled Inflation Reduction Act Grants to Nonprofits
Judges side with Trump EPA over canceled Inflation Reduction Act grants to nonprofits, marking a major shift in how $20 billion in climate-related funding will be managed. The ruling, issued by an appellate court, supports the EPA’s decision to halt Biden-era grants, sparking backlash from environmental groups and nonprofits that had already committed billions in projects.
Image Credits:Al Drago/Bloomberg / Getty Images
The Court’s Ruling and Its Impact
The appellate court’s decision sided with EPA administrator Lee Zeldin, who argued that the Inflation Reduction Act grants conflicted with the agency’s current priorities. The judges—both Trump appointees—ruled that the cancellations were valid, emphasizing the government’s responsibility to ensure proper oversight and prevent potential misuse of funds.
The ruling reverses a lower court’s judgment, which had called Zeldin’s actions “arbitrary and capricious.” Critics argue the decision sets a troubling precedent, as many nonprofits had already begun projects relying on the frozen funds.
Billions in Climate Projects at Risk
Nonprofits like Climate United and Power Forward were among those most affected. Climate United had committed $392 million in renewable energy projects, including solar power in Oregon, Idaho, and Arkansas. Power Forward had pledged $539 million but was left unable to pay contractors after the freeze.
The blocked grants were originally intended to create revolving loan funds for clean energy, with repayments fueling additional projects. Now, many of these initiatives face delays or cancellation, leaving rural and underserved communities in limbo.
Fraud Concerns and Legal Disputes
Zeldin justified the cancellations by citing potential fraud, though a lengthy investigation found little supporting evidence. Instead, the EPA focused its court arguments on the contractual nature of the grants. The majority agreed that disputes over the money should be handled by the U.S. Court of Federal Claims rather than the wider federal judiciary.
However, the dissenting judge, an Obama appointee, pushed back sharply, stating that the EPA had “no lawful basis” to interfere with funds already allocated under Congress’s instructions.
What Comes Next
The decision to back the Trump EPA has raised alarms for environmental groups, nonprofits, and lawmakers who see it as undermining Congress’s climate agenda. For now, the legal fight is far from over, with nonprofits expected to continue challenging the ruling.
As the battle over Inflation Reduction Act funding unfolds, one thing is clear: the future of billions in clean energy investments hangs in the balance.
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