On August 4, 2026, the en banc D.C. Circuit Court of Appeals affirmed the entirety a district court’s April 2025 preliminary injunction that barred the U.S. Environmental Protection Agency (EPA) from effectuating its March 11, 2025 notice of termination of grants under the Inflation Reduction Act’s (IRA’s) Greenhouse Gas Reduction Fund (GGRF). The preliminary injunction also restricted EPA’s ability to suspend or terminate the plaintiffs’ grant awards; restricted defendant Citibank’s ability to move funds out of accounts established in connection with the plaintiffs’ grants; prohibited EPA from influencing Citibank to limit access to funds in such accounts; and required Citibank to disburse funds “properly incurred” before the suspension of the plaintiffs’ funds. The six judges who voted to affirm the injunction were split on the injunction’s scope. Six judges voted to affirm the portion of the injunction enjoining EPA from effectuating its notice of termination because they concluded that (1) EPA’s attempt to terminate the grants and claw back disbursed funds “based solely on a policy disagreement” with Section 60103 of the IRA “likely contravened the IRA’s mandatory appropriation” and (2) EPA did not argue or show it would not still take those steps in the absence of the injunction. Five of those judges would have affirmed the entire preliminary injunction because they concluded that the One Big Beautiful Bill Act’s (OBBBA’s) repeal of Section 60103 in 2025 “likely does not affect the applicability of Section 60103 to grant funds that were obligated and disbursed” at the time of the OBBBA’s enactment. The sixth judge would have vacated portions of the preliminary injunction because the EPA could not be enjoined to expend funds to administer the program after the OBBBA rescinded the program’s dedicated administrative funds; the sixth judge would have required defendant Citibank to keep funds in the plaintiffs’ accounts in place pending district court determinations on questions regarding EPA’s plans regarding primary grantees’ grant agreements and regarding the OBBBA’s effect on sub-grantees’ funds. Four judges would have vacated the provision barring EPA from effectuating the notice of termination based on their conclusion that the plaintiffs did not establish that the injunction was warranted after the repeal of Section 60103. The en banc court was equally divided as to (1) whether following the OBBBA’s enactment, EPA’s authority to suspend or terminate the grants was limited by both IRA Section 60103 and contractual terms or only by contractual terms and (2) whether any of the district court’s remaining grounds for the preliminary injunction would provide a basis for affirmance. Additional analysis of the decision is available in this Climate Law Blog <a href="https://blogs.law.columbia.edu/climatechange/2026/08/07/a-big-win-in-few-words-what-to-glean-from-the-climate-united-fund-decision/">post</a>.

Lawsuits challenging EPA's freezing and purported termination of funding under the Inflation Reduction Act’s Greenhouse Gas Reduction Fund.

Climate United Fund v. Citibank, N.A.

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En Banc D.C. Circuit Affirmed Preliminary Injunction Blocking EPA Termination of Greenhouse Gas Reduction Fund Grants but Did Not Offer Consensus Rationale

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En Banc D.C. Circuit Affirmed Preliminary Injunction Blocking EPA Termination of Greenhouse Gas Reduction Fund Grants but Did Not Offer Consensus Rationale

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