A federal appeals court has ruled that the Trump administration improperly terminated billions of dollars intended for clean energy projects, a decision that favors a coalition of nonprofits selected to spearhead a key Biden-era climate initiative.

While the ruling marks a significant win for groups like Climate United Fund, they will not immediately access the funds. The decision will be temporarily paused, allowing the Environmental Protection Agency (EPA) several days to consider an appeal to the Supreme Court.

This closely divided ruling by the full U.S. Court of Appeals for the District of Columbia represents a setback for the Trump administration’s early attempts to dismantle President Joe Biden’s efforts to curb climate-warming greenhouse gases. The program in question, the Greenhouse Gas Reduction Fund, often called a "green bank," is a $20 billion congressionally authorized initiative. It was designed to provide money to nonprofits, which would then offer loans and invest in small energy projects, energy-efficient buildings and transportation.

EPA Administrator Lee Zeldin had accused Climate United Fund and other chosen nonprofits of mismanagement and potential fraud. He subsequently froze billions held in a Citibank account for the program and terminated their grants. The groups vehemently denied any wrongdoing, filing a lawsuit that argued the Trump administration had violated the law and the Constitution by refusing to spend funds authorized by Congress.

“Despite efforts to harm the awardees with false allegations and misinformation, there remains no legal basis for terminating our grant award and clawing back funds that were already disbursed in our bank accounts,” Climate United Fund said in a statement.

In September, a divided three-judge panel of the same appeals court overturned a lower court and said the Trump administration had broad power to cancel grants without having to face charges of illegality in federal court. The full appeals court agreed to revisit that decision, a rare occurrence reserved for the most important cases.

The green bank was created by the Inflation Reduction Act. President Trump’s tax and spending bill last year, however, repealed part of the law that established the bank and rescinded money that hadn’t already been obligated to its recipients. That added a layer of complication.

Six of 10 judges agreed with a lower court judge that the EPA likely violated the law when it terminated the grants and tried to claw back funds based on a policy disagreement. This would likely contradict the law's direction to spend money on the program, they said.

Zeldin early last year told Fox News that he suspected the green bank “was a clear-cut case of waste and abuse” that “in my opinion, is criminal.”

The EPA did not immediately provide comment.

U.S. District Judge Tanya Chutkan last year said that when the federal government was asked for evidence of fraud, the agency didn’t provide it and shifted its position to more general concerns about the level of EPA oversight over the program. Chutkan ruled the government can’t violate the law and terminate the contracts and that the groups should have access to some of their frozen money. That order was put on hold during appeal.

A lawyer for the nonprofits argued that the agency had already allocated the money by putting it in the Citibank account for the program’s use.

The agency argued the nonprofits are making constitutional and statutory arguments that don’t apply in a simple contract fight, and that the matter should be heard by a different court that can only award a lump sum — not force the government to keep the grants in place. Federal officials argue there is no law or provision in the Constitution that compels the EPA to make these grants to these groups.