A federal appeals court sided with the Environmental Protection Agency in its effort to freeze billions of dollars and terminate contracts for nonprofits charged with running a "green bank" to finance climate-friendly projects.

The decision from the U.S. Court of Appeals for the District of Columbia Circuit, handed down in a 2-1 ruling, shifts the dispute away from the federal district court and into the U.S. Court of Federal Claims, which handles contract matters. For the nonprofits involved, including Climate United Fund, the ruling represents a major setback in their push to regain access to roughly $16 billion in frozen funds.