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Judges side with Trump EPA over canceled Inflation Reduction Act grants to nonprofits

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Judges side with Trump EPA over canceled Inflation Reduction Act grants to nonprofits Tim De Chant PM PDT · September 2, 2025 The battle over $20 billion worth of climate-related funding

The legal tussle stems from EPA administrator Lee Zeldin’s decision to cancel grants dispersed as part of the Inflation Reduction Act. Zeldin said that the grants did not match the EPA’s current priorities and claimed, without evidence, that he had concerns about fraud.

A district court had previously ruled that Zeldin’s actions were “arbitrary and capricious.”

The two majority justices, both Trump appointees, wrote that Zeldin’s cancellation of the contracts was valid and that the government “must ensure proper oversight and management” of the grants. They cited in support of their decision an undercover video taken

In March, court filings revealed that the EPA along with the FBI and the EPA inspector general had instructed Citibank to freeze money that had already been placed in accounts controlled

The grants in question were awarded to a range of nonprofits, including Climate United and Power Forward. At the time of the March hearing, Climate United had committed to $392 million in projects based on the money in its accounts, including $63 million for solar power developments in Oregon and Idaho and another $31.8 million in solar projects in rural Arkansas. Power Forward had committed $539 million and said the freeze left it unable to pay contractors’ outstanding invoices.

Zeldin had claimed that fraud was one of his main concerns, though a lengthy investigation

Techcrunch event Tech and VC heavyweights join the Disrupt 2025 agenda Netflix, ElevenLabs, Wayve, Sequoia Capital, Elad Gil — just a few of the heavy hitters joining the Disrupt 2025 agenda. They’re here to deliver the insights that fuel startup growth and sharpen your edge. Don’t miss the 20th anniversary of TechCrunch Disrupt, and a chance to learn from the top voices in tech — grab your ticket now and save up to $600+ before prices rise. Tech and VC heavyweights join the Disrupt 2025 agenda Netflix, ElevenLabs, Wayve, Sequoia Capital — just a few of the heavy hitters joining the Disrupt 2025 agenda. They’re here to deliver the insights that fuel startup growth and sharpen your edge. Don’t miss the 20th anniversary of TechCrunch Disrupt, and a chance to learn from the top voices in tech — grab your ticket now and save up to $675 before prices rise. San Francisco | October 27-29, 2025 REGISTER NOW Perhaps as a result of a lack of evidence of fraud, EPA arguments before the appeals court focused on the contractual nature of the grants. The majority of justices agreed that the matter should be heard

The dissenting justice, an Obama appointee, said that the EPA “has no lawful basis — nor even a nonfrivolous assertion of any basis — to interfere with funding that, pursuant to Congress’s instructions, already belongs to Plaintiffs.”

The plaintiffs are likely to appeal to the U.S. Supreme Court. If they fail there, the EPA could still be liable for billions of dollars, according to legal analysis

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Tim De Chant Senior

Tim De Chant is a senior climate

De Chant is also a lecturer in MIT’s Graduate Program in Science Writing, and he was awarded a Knight Science Journalism Fellowship at MIT in 2018, during which time he studied climate technologies and explored new business models for journalism. He received his PhD in environmental science, policy, and management from the University of California, Berkeley, and his BA degree in environmental studies, English, and biology from St. Olaf College.

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