A federal appeals court on Tuesday overturned a ruling by U.S. District Judge Tanya Chutkan, siding with the Trump administration in blocking billions of dollars in Biden-era climate grants. Chutkan, an Obama appointee, had previously issued an injunction preventing former Rep. Lee Zeldin and the EPA from reclaiming \$20 billion under the Greenhouse Gas Reduction Fund (GGRF), which had been frozen at Citibank for eight nonprofit groups.

The nonprofits involved included the Coalition for Green Capital, Climate United Fund, Power Forward Communities, Opportunity Finance Network, Inclusiv, and the Justice Climate Fund, according to the Associated Press. Chutkan had ordered the release of the \$20 billion to these groups by Thursday, but the Trump administration quickly appealed the decision.

On Tuesday, a three-judge panel ruled 2-1 in favor of Trump’s EPA, blocking the disbursement. Judge Naomi Rao, writing for the majority, criticized Chutkan’s reasoning for issuing the injunction. She wrote, “We conclude the district court abused its discretion in issuing the injunction. The grantees are not likely to succeed on the merits because their claims are essentially contractual, and therefore jurisdiction lies exclusively in the Court of Federal Claims.”

Rao added that while the district court had jurisdiction over the constitutional claim, it was meritless. She emphasized that the equities favored the government, which must ensure proper oversight of this multi-billion-dollar fund. As a result, the injunction was vacated.

Zeldin canceled the grants after a Project Veritas undercover video showed EPA adviser Brent Efron admitting the agency had rushed to allocate billions to climate initiatives as an “insurance policy” ahead of President Trump’s inauguration.