September 4, 2026.
Cities, community organizations and Tribal Nations are continuing to fight in federal court to preserve nearly $3 billion in environmental and climate justice funding after the U.S. Environmental Protection Agency canceled the program and appealed a federal judge's ruling that the termination was unlawful.
The latest development came this week, as plaintiffs asked a South Carolina federal judge to protect the funding while the federal government's appeal moves forward. Law360 reported Thursday that cities and organizations challenging the EPA's cancellation "asked a South Carolina federal judge...to preserve the funding while the agency appeals the decision."
The dispute centers on the Environmental and Climate Justice Block Grant Program, created through the Inflation Reduction Act. The EPA says Congress appropriated $2.8 billion for financial assistance and another $200 million for technical assistance through the program, with awards required to be made by September 30, 2026.
Federal judge ruled EPA cancellation unlawful.
U.S. District Judge Richard Gergel of the District of South Carolina ruled in June that the EPA's decision to eliminate the program was unlawful.
Inside Climate News reported that Gergel found the EPA's termination of the $2.8 billion program violated the Administrative Procedure Act and "voided the action."
The Southern Environmental Law Center and Public Rights Project are representing plaintiffs challenging the cancellation.
Public Rights Project says the court ruled June 11 that the EPA "broke the law when it eliminated the Environmental and Climate Justice block grant program in 2025." The organization said the court found that the agency violated the Administrative Procedure Act.
But the legal victory has not resulted in the immediate release of the money.
In July, Gergel ordered the EPA to administer the program and make funding available through the September 30 deadline. Public Rights Project says the judge specifically found that EPA was "defying this court's prior order" by refusing to implement the program.
The federal government subsequently appealed. On August 20, the Fourth Circuit Court of Appeals granted the EPA's request for a stay, temporarily putting the lower court's order on hold while the appeal proceeds.
Alaska Tribal Nations have a significant stake.
The fight has particular importance for Alaska Tribal Nations and Alaska Native communities because the EPA originally identified a substantial portion of its Community Change Grant funding specifically for projects benefiting federally recognized Tribes in Alaska.
In a November 2023 announcement, the EPA said approximately $150 million of the Community Change Grant funding had been targeted toward projects benefiting federally recognized Tribes in Alaska.
The EPA said those projects could address issues including contaminated lands, pollution reduction, clean-water infrastructure, community energy resilience, permafrost degradation, climate emergency response and other climate-related challenges.
Then-EPA Administrator Michael Regan said the agency had heard concerns from Alaska communities about "climate impacts and adaptation, subsistence foods security, water infrastructure and security, contaminated lands" and other environmental challenges.
The agency's announcement also specifically identified contaminated lands conveyed through the Alaska Native Claims Settlement Act as an area eligible for funding.
Kipnuk lost $20 million erosion project.
One of the clearest examples of what is at stake is the Native Village of Kipnuk, where a $20 million EPA Community Change Grant intended to address severe riverbank erosion was canceled.
According to reporting by KYUK, the grant would have funded construction of a rock retaining wall along approximately 1,800 feet of the eroding Kugkaktlik River.
Rayna Paul, environmental director for the Native Village of Kipnuk, told KYUK that the community was losing approximately 10 to 28 feet of riverbank each year because of permafrost thaw, increasingly severe weather and recurring flooding.
Paul told KYUK:
"We're losing, like, 10 to 28 feet of river bank each year as a result of permafrost thaw and increased frequency and severity of extreme weather events and recurring flooding."
She said the proposed project was intended to protect critical infrastructure, including the community's fuel facilities, windmills, public boardwalks, store, homes and other buildings.
The Alaska Department of Commerce, Community and Economic Development also lists the Kipnuk project in its disaster recovery planning documents. The state identifies the project as a $20 million flood and erosion-control project and says the EPA Community Change Grant was "awarded and canceled."
Paul also described the emotional impact of losing the grant after the community had worked to secure it.
"It's just so draining when you hear something that you worked hard for to help your community, it was just not something I would have expected."
Sheryl Musgrove, who directs the climate justice program at the Alaska Institute for Justice, told KYUK that the community had been clear about what it needed.
"We do not want more assessments. We want action."
Other Alaska projects affected.
Kipnuk was not the only Alaska community reporting the loss of EPA funding.
KYUK reported that the EPA canceled nearly $20 million for a tribal wind-power project in Kotzebue and another $20 million for a project in Tyonek intended to remove toxic materials from homes.
The EPA's own 2023 announcement had identified Alaska-specific priorities that included community energy resilience and addressing contaminated lands.
Deadline adds urgency.
The legal fight is becoming increasingly urgent because the statutory deadline for the program is September 30.
Inside Climate News reported that plaintiffs are seeking to effectively pause the September 30 expiration date while the litigation continues. The publication reported that plaintiffs are concerned that the government could prevail simply by allowing the clock to run out.
Kym Meyer, litigation director for the Southern Environmental Law Center, told Inside Climate News:
"The bottom line is it's now clear that what the government did was illegal."
Meyer also described the situation for affected communities as "a complete nightmare" and said communities that followed the rules have still not received the funding.
Public Rights Project likewise says the funding must be committed by September 30, 2026, and that plaintiffs are seeking court action to prevent the deadline from effectively eliminating the program before the legal dispute is resolved.
What it means for Alaska.
For Alaska Tribal Nations, the dispute is about more than an abstract federal funding fight.
The EPA's original program specifically contemplated investments addressing erosion, permafrost, contaminated lands, water infrastructure, energy resilience and climate adaptation—issues that directly affect many Alaska Native communities.
Kipnuk illustrates the consequences. The community had secured federal funding for an erosion-control project, only to have the award canceled while the threat to its infrastructure continued.
As the September 30 deadline approaches, the courts will determine whether the EPA must continue administering the program and whether communities that were selected for funding will have an opportunity to receive and use the money Congress appropriated.
The EPA's current position is being defended through the ongoing appeal. Inside Climate News reported that the agency declined to comment on the pending litigation.
For Alaska Tribal Nations, the outcome could determine whether millions of dollars intended for climate resilience, pollution reduction, energy infrastructure and protection of vulnerable communities remain available—or disappear before the legal challenge is resolved.
Sources
- Law360 — Cities, Groups Ask Judge To Keep $3B EPA Grant Funding Alive
- Inside Climate News — Underserved Communities Again Ask Courts to Restore Justice Grant Funding
- Public Rights Project — Sustainability v. Trump litigation tracker
- U.S. Environmental Protection Agency — Environmental and Climate Justice Program
- U.S. EPA — $150 Million for Alaska Native Villages
- KYUK/Alaska Public Media — Kipnuk searches for answers after loss of $20M grant
- Alaska Department of Commerce — CDBG-DR Public Action Plan
