Billions in Climate Grants, Frozen for a Year, Are Back in Court

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by Claire Brown

February 24, 2026

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Billions of dollars in climate grants intended for clean energy projects remain frozen in legal limbo more than a year after the Environmental Protection Agency (EPA) Administrator Lee Zeldin sought to cancel them. The funds, awarded by Congress under the Biden administration, were initially blocked by the Trump-era EPA, which claimed misconduct and potential fraud. Despite extensive investigations by the FBI and the EPA’s Office of Inspector General finding no evidence of wrongdoing, the agency persists in its efforts to claw back the money, leaving eight nonprofit organizations struggling to maintain operations. The $20 billion in grants, known as green bank funding, were meant to support renewable energy projects across the country. These funds would have been leveraged into low-cost loans and investments for solar, wind, and other clean energy initiatives. However, due to the legal battle, many of these projects remain on hold. One organization, Power Forward Communities, which was awarded $2 billion, has had to lay off most of its staff and halt all planned projects, including energy-efficiency upgrades in affordable housing developments. The nonprofits involved have faced significant challenges as a result of the frozen funds. Some have been forced to cut back on staffing and restructure their operations. For instance, Power Forward Communities, which initially planned to assemble a team of 30 to manage its grant-funded projects, is now down to just two employees. This financial uncertainty has created instability for organizations already working to address critical climate issues. The legal battle over these grants highlights the ongoing tension between federal agencies and Congress regarding authority and oversight. The EPA’s decision to freeze the funds despite lacking evidence of fraud has drawn criticism from environmental advocates and the nonprofits involved. The case is now being reconsidered by the U.S. Court of Appeals for the District of Columbia Circuit, with arguments scheduled for Tuesday. This prolonged legal battle not only impacts the ability of these organizations to advance clean energy projects but also raises

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Originally published on NYT Homepage on 2/24/2026