US Court Declares EPA Likely Unlawful in Attempt to Cancel Clean Energy Grants

A federal appeals court has ruled that the Environmental Protection Agency (EPA) likely acted unlawfully in its attempt to cancel a series of clean‑energy grants issued under the Biden administration. The decision, issued by the U.S. Court of Appeals for the Fifth Circuit, found that the EPA’s move to rescind the grants violated statutory and procedural requirements, including a failure to provide adequate notice and opportunity for comment under the Administrative Procedure Act.

The grants in question were part of the EPA’s Clean Energy Investment Program, which provided funding for projects ranging from solar farms to energy‑efficient retrofits across the country. The agency’s sudden cancellation, announced in a memorandum last year, was challenged by several recipients and environmental groups who argued that the EPA had no authority to unilaterally revoke the awards without a formal rule‑making process. The court’s opinion emphasized that the agency’s action was “likely unlawful” because it bypassed required public notice and did not demonstrate a compelling reason to withdraw the funding.

The ruling leaves the future of the affected grants uncertain and signals a potential check on the EPA’s discretionary power. While the agency may appeal the decision, the judgment underscores the importance of following established administrative procedures when altering federal grant programs.