The ruling is a win for eight nonprofit groups.
Those groups had been fighting for access to their own money since February 2025. That is when EPA Administrator Lee Zeldin, the FBI, and the Treasury Department had Citibank freeze the accounts, locking the groups out of their own cash.
The groups sued to get their money back. Their case eventually reached the D.C. Circuit, where the judges heard it.
The money came from the Greenhouse Gas Reduction Fund, created by the Inflation Reduction Act. The law set up the fund to support clean-energy projects, and most of the money went to lending operations that help businesses and communities rely less on fossil fuels.
The court noted that late-payment rates on those loans look a lot like what commercial lenders see. This was not a giveaway; it worked like a bank.
When the freeze hit, that work stopped. Projects and plans had to wait while the groups fought to get the money back.
The EPA under Trump argued that it had the right to cancel the grants. It pointed to a later law called the One Big Beautiful Bill Act, which it said repealed the part of the Inflation Reduction Act that created the fund and gave the agency the power to take the money back.
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The six judges in the majority said the agency broke the law when it withheld money Congress had already directed to the fund.
The government had already promised and paid out the money, they said, so it could not use a later law to grab it.
The ruling keeps in place a court order that blocks the EPA from recovering money that has already left the Treasury.
The ruling does not end the legal fight. The EPA is weighing an appeal.
The Freeze Already Hurt Some Groups
The nonprofits welcomed the ruling, though for some it may be too late. During the freeze, many groups made major cutbacks.
Climate United's CEO departed in March and has not been replaced.
Power Forward Communities has two staff members left.
Other groups laid off workers. A court victory cannot bring those jobs back.
Some of those cutbacks may be hard to reverse. The ruling gives them room to plan again, but it does not give them back the months they lost.
The EPA now has seven days to ask the Supreme Court to hear the case. While that plays out, the organizations can use the money.
For investors, the bigger story is about policy risk. The government can create a program, fund it, freeze it, and then challenge it, sometimes within a few years.
If the government can freeze a program while the courts sort it out, the people running it have to make decisions without knowing the final answer. If you hold clean-energy investments, that uncertainty is part of the risk.
It sits right next to project costs, interest rates, and demand. A single ruling can settle the law, but it cannot rewind the months the accounts sat frozen.
That is policy risk in action.
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