Trump Admin Can Cancel $16 Billion in Environmental Grants, Court Rules

An appeals court ruled on Tuesday that the Trump administration can rescind $16 billion in climate grants awarded under the Biden administration’s Inflation Reduction Act.

The Details: The decision comes after five environmental nonprofits sued the Trump administration in February over freezing the grants. In a 2-1 ruling, the US Court of Appeals for the District of Columbia Circuit said the dispute is a contractual matter that belongs in the US Court of Federal Claims, overturning a lower court ruling that had blocked the action. The funds were distributed last year to eight nonprofits to support projects to reduce greenhouse gas emissions and air pollution.

For Context: In April 2024, the Environmental Protection Agency (EPA) distributed $20 billion in climate and clean energy grants to eight nonprofit organizations through the Green Bank program. It was part of President Biden’s 2022 Inflation Reduction Act. In February, President Trump halted the funding after EPA Administrator Lee Zeldin raised concerns that the money could be susceptible to fraud.

How the Media Covered It: Fox News (Right bias) framed the rescission as part of Trump’s broader efforts to tackle government spending and cut its workforce. It quoted Judge Neomi Rao who said the EPA modified grants “to make it more difficult for the government to terminate” them, and an EPA spokesperson who said “reason prevail[ed]” in the courtroom. New York Times (Lean Left) emphasized the impacts of the rescission on the environmental nonprofits, including the legal battle surrounding the decision. The Hill (Center) wrote the decision doesn’t settle the “ultimate outcome of the case” and quoted Judge Rao saying that if the grant cancellations are later found to breach the contracts, the government could have to pay damages to the grantees.

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