By Premium News Naija
Millions of dollars in climate finance meant to support renewable energy, decarbonisation, and green economic transition projects are back at the centre of a bitter legal fight in the United States, raising alarms among environmental groups, investors, and climate advocates worldwide.
The legal battle over $20 billion in climate grants, originally awarded under the Greenhouse Gas Reduction Fund (GGRF) created by the 2022 U.S. Inflation Reduction Act, has returned to the U.S. Court of Appeals after nearly a year of frozen funds, lawsuits, and conflicting judicial decisions.
What Happened to the Climate Grants?
Under the Biden Administration, the U.S. Environmental Protection Agency (EPA) awarded billions in climate grants to nonprofit organisations such as Climate United Fund, the Coalition for Green Capital and Power Forward Communities. These grants were designed to finance clean energy infrastructure, community solar initiatives, green lending programmes, and projects focused on reducing greenhouse gas emissions.
Soon after President Donald Trump returned to office, the new EPA leadership froze disbursements, claiming concerns about fraud, waste, and improper oversight and then moved to cancel many of the awards entirely. The freeze effectively immobilised billions of dollars that had been put in financial trust accounts managed through institutions like Citibank.
Legal Fight in the Courts
Grant recipients and allied environmental groups challenged the freeze and termination in federal court, arguing that the EPA acted unlawfully by failing to provide adequate justification and by undermining Congress’s funding decisions. In April 2025, a federal district judge ruled that the EPA did not provide sufficient evidence to terminate the grants, blocking the agency from clawing back the funds.
The case then moved to the U.S. Court of Appeals for the District of Columbia Circuit:
In September 2025, a three‑judge appellate panel initially sided with the EPA and allowed the freeze to stand, holding that the district court lacked jurisdiction to reinstate the funding.
Grant‑makers sought a full court rehearing, which was granted, bringing the case before all active judges of the D.C. Circuit and that en banc hearing took place on February 24, 2026.
During the rehearing, judges pressed the EPA’s lawyers on whether the agency’s justification particularly claims of widespread misconduct was adequately supported by evidence or simply a pretext for ending climate programmes. Reports from the proceedings indicate a cautious skepticism toward the government’s rationale, with some jurists signalling openness to reinstating the funds and restoring access for grantees.
Why This Matters to Africa and Beyond
The implications of this case extend well beyond U.S. borders:
Global climate finance and green investment depend on predictable flows of funding. Disruption in one of the world’s largest climate financing systems could send shockwaves through green bond markets and multilateral funding mechanisms.
African nations, including Nigeria, are increasingly seeking climate finance packages to support renewable energy, climate adaptation, and carbon‑reduction strategies. Legal turmoil in major donor economies undermines confidence in the reliability of such future funding.
The court’s decision will also influence how climate funds are structured and administered internationally, particularly when public dollars are involved.
Political and Policy Implications
This case also encapsulates broader political battles over climate policy in the United States. Supporters of the frozen grants argue that Congress is not the executive branch that has sole authority to allocate appropriated funds, especially when it comes to environmental sustainability programs. Opponents contend that agencies must exercise due oversight to prevent waste and ensure taxpayer dollars are used responsibly.
Meanwhile, separate legal actions have been launched by U.S. states like California and New York to force release of other federal clean energy funds that were similarly rescinded or suspended.
Looking Ahead
The appeals court’s decision likely months away, will be closely watched by climate policy experts, investors, and international development partners. A ruling in favour of reinstating the grants could reinvigorate green finance deployment, while a decision upholding the freeze could dampen investor confidence and slow climate action efforts both domestically and abroad.
Premium News Naija will continue to monitor developments in this landmark climate finance case and what it means for global funding mechanisms, sustainable development goals, and climate policy resilience.
Tags
- Climate finance
- Green energy grants
- U.S. environmental policy
- Renewable energy
- Global climate funding
- Inflation Reduction Act
- EPA lawsuits
- Nigeria climate news
- Sustainable development
- Green investment
Sources
- New York Times: Billions in Climate Grants Frozen for a Year Are Back in Court
- Utility Dive: Appeals Court Rehears Climate Funding Freeze
- E&E News: Appeals Court Questions EPA on Grant Termination
- Reuters: States Sue to Unlock Clean Energy Funding
- U.S. Court of Appeals Case Documents
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