On August 4, 2026, a federal appeals court ruled that the Trump administration did not have the authority to take back $20 billion in climate funding that had already been given to nonprofit organizations. The court said the EPA could not reclaim money already sitting in the nonprofits' bank accounts and ordered the agency to unfreeze those funds. The climate groups now have access to their money while the EPA decides whether to appeal to the U.S. Supreme Court. The agency has seven days from the ruling to file an appeal TechCrunch.

The money comes from a program called the Greenhouse Gas Reduction Fund, or GGRF, which was created by the Inflation Reduction Act. Congress set aside $27 billion for the GGRF overall. According to an independent audit, about $20 billion of that was used to set up two grant programs: the National Clean Investment Fund and the Clean Communities Investment Accelerator. The EPA sent these funds through Citibank. The agency described the GGRF as a first-of-its-kind program that uses competitive grants to attract private investment for clean energy and climate projects Bloomberg Law.

The funds had been frozen since early in President Trump's second term. In February 2025, EPA Administrator Lee Zeldin, working with the FBI and the Treasury Department, told Citibank to freeze the accounts of eight climate nonprofit groups. A federal judge later blocked the EPA's first attempt to cancel the $20 billion in grants, saying there was no evidence of waste or fraud. That set the stage for the appeals court case New York Times.

The legal dispute came down to a clash between two laws. The EPA argued it could take the money back because Congress repealed the section of the Inflation Reduction Act that created the GGRF through a law called the One Big Beautiful Bill Act. The EPA's own financial report states that the $27 billion GGRF was repealed in full by Congress TechCrunch.

The appeals court judges disagreed with the EPA's reading of the situation. The court found that the EPA unlawfully froze and shut down the National Clean Investment Fund grant program and was trying to take the money back "solely on a policy disagreement." The judges ruled that the One Big Beautiful Bill Act did not give the EPA grounds to reclaim money that had already been paid out into the nonprofits' accounts TechCrunch.

This August 4 ruling overturned an earlier decision from September 2, 2025, made by a smaller group of three judges. That panel had allowed the Trump administration to move forward with canceling more than $16 billion in grants to nonprofit groups working on climate change Reuters.

The frozen accounts did serious damage to the organizations involved, which were built to put large amounts of money to work in communities. Many of the climate groups had to make deep cuts while their accounts were locked. Climate United's CEO left in March and had not yet been replaced. Power Forward Communities was down to just two employees New York Times. These organizations were designed to direct federal money into local community financing. For example, Inclusiv, which received GGRF money through the Clean Communities Investment Accelerator, planned to fund credit unions so they could offer affordable clean energy loans in low-income and disadvantaged communities.

The broader context here is that this ruling sets a clear limit on how far a government agency can go in taking back money it has already paid out, even if the law that authorized the spending has since been repealed. The court drew a line between Congress repealing a program and the executive branch's ability to grab back money that had already been distributed. That distinction narrows what a new administration can do to undo a previous administration's spending. For the technology and infrastructure sectors that have been waiting on these funds, the unfreezing of the accounts puts a large pool of capital back into play after more than a year on the sidelines.

The EPA now faces a narrow window to take the case to the Supreme Court. If the agency does not appeal, or if the Supreme Court declines to get involved, the nonprofits will regain full control of their accounts. The open question is whether the affected organizations, after the staff cuts and lost time, can still meet the goals they were originally funded to achieve.