A US federal appeals court has ruled that the Trump administration acted unlawfully when it terminated and attempted to claw back $20 billion in climate funding that had already been paid out to nonprofit organisations. The Court of Appeals for the District of Columbia Circuit found that the Environmental Protection Agency, under Administrator Lee Zeldin, had no legal authority to reverse disbursements it disagreed with on policy grounds, in a decision that restores access to funds frozen since February 2025 and affects the future of a major clean energy investment programme.

Eight nonprofit groups had sued after the EPA, together with the FBI and Treasury Department, ordered Citibank to freeze their accounts, blocking money from the $20 billion Greenhouse Gas Reduction Fund created under the Inflation Reduction Act to support clean energy loans. Six of the ten appeals court judges backed lifting the freeze, rejecting the EPA's argument that the later One Big Beautiful Bill Act, which repealed the fund's legal basis, justified reclaiming money already obligated and disbursed. The EPA now has seven days to decide whether to appeal to the Supreme Court, but the prolonged freeze has already forced job losses and leadership departures at organisations including Climate United and Power Forward Communities.