Law firm Vinson
& Elkins reported on New York’s Climate Change Superfund Act in March 2025
and updated it to reflect legal challenges and amendments to the law as shown
below.
“On December 26, 2024, New York Governor Kathy Hochul
signed the Climate Change Superfund Act (“CCSA” or the “Act”) into law. The law
requires certain fossil fuel producers and refiners with sufficient connections
to New York to pay into a state “climate Superfund” an amount commensurate with
the entity’s past global greenhouse gas (“GHG”) emissions over an eighteen-year
period. The New York State Department of Environmental Conservation (“NYSDEC”)
will collect $75 billion from these entities over the next 25 years. New York
intends to use these funds to pay for climate change-related infrastructure
projects and other climate-related expenses. The CCSA is the second of its
kind, behind Vermont’s Climate Superfund Act, and is just one of many similar
bills proposed in other states. Although the CCSA is likely to face legal
challenges, and the New York legislature has already proposed amendments to the
CCSA, these “climate Superfund” laws may not be going away any time soon.”
Update
“The New York Climate Change Superfund Act (“CCSA”) now
faces legal challenges on two separate fronts. On February 6, 2025, twenty-two
states and four industry groups sued New York in federal court, and, on
February 28, 2025, four other groups, including the U.S. Chamber of Commerce
and American Petroleum Institute (“API”), filed a similar suit challenging the
Act in a different federal court. Both suits seek a declaration that the CCSA
is unlawful and an injunction prohibiting New York from enforcing it.”
“The lawsuits challenge the constitutionality of the
statute on several grounds. First, the suits allege that the CCSA violates
constitutional principles of cooperative federalism as it seeks to impose
liability on out-of-state actors for conduct outside New York. Second, the
plaintiffs argue that the CCSA violates the Supremacy Clause of the
Constitution because it is preempted by the federal Clean Air Act’s regulation
of greenhouse gas emissions. The suits further claim that the CCSA’s
retroactive liability scheme violates the Due Process Clause of the Fourteenth
Amendment. Indeed, the states and industry groups argued in their February 6,
2025, complaint that the Act’s retroactive application is “fundamentally
unfair.” Other causes of action include allegations that the CCSA violates the
Eighth Amendment prohibition on excessive fines, the Commerce Clause by
discriminating against economic interests important to other states, and the
Fifth Amendment prohibition on unconstitutional takings. These claims mirror
those brought by the Chamber and API against Vermont’s Climate Superfund Act,
enacted last year.”
“The lawsuits come alongside amendments to the CCSA signed
into law by Governor Hochul on February 28, 2025. The amended CCSA imposes
liability for emissions from 2000-2024, six years longer than the original
period, eliminates the minority interest liability provision we discuss below
in its entirety, requires entities to pay their cost recovery demands in full
rather than over 25 years, and sets forth a new process by which responsible
parties can challenge the cost recovery demand. The amended CCSA also authorizes
the NYSDEC to seek information from entities that may be needed to make
liability determinations and provides additional time—until June 2027 rather
than December 2026—for the NYSDEC to develop implementing regulations.”
The law is inherently unfair,
unfairly retroactive, and likely unconstitutional since it violates the
commerce clause and puts state regulation above federal regulation. It is also
intensely punitive. It is an attempt to make fossil fuel producers pay that is
in line with New York’s Progressive Democratic ideals and goals. As someone who
votes Democrat, I am appalled by the law and do not support it at all. It is an
example of what is wrong with the Democrat party and why it receives deserved
backlash. However, I still believe Democrats are better than Republicans
overall, though not at all in this case. I certainly hope and think the legal
challenges should succeed in rescinding this law and others like it. There is
no good reason to fleece companies from other states for lawfully providing
energy in order to pay for overreaching climate goals.
West Virginia Attorney
General J.B. McClusky argued successfully in an op-ed in the New York Post that
the law is unfair, unconstitutional, and basically bonkers. First, he points
out that West Virginia coal miners mined the coal that made the steel that
built many of New York City’s monumental constructions like the Brooklyn
Bridge. McClusky argues that it is unfair that the state’s Department of
Environmental Conservation (DEC) gets to decide who to fine and how much. He also
rightly argues that the law is authoritarian.
“The DEC doesn’t have to find fault. It doesn’t have to
file a lawsuit and convince a judge or jury that a particular energy producer
caused specific harm to New York.”
“No, the law declares energy producers to be
automatically “responsible” just because politicians say so.”
“That’s not justice, and it’s not the rule of law.”
“That’s authoritarian bureaucrats picking winners and
losers.”
“And the losers will be many.”
“The statute requires energy producers to pay $75
billion to the state of New York — money that could be spent on salaries and
benefits for workers, or for new infrastructure projects to make everyone’s
energy more affordable.”
“That $75 billion loss will cause three things: job
loss, higher prices at the pump and higher utility bills — hurting hardworking
Americans across the board, New Yorkers included.”
He points out that the
Constitution “prohibits any state from unduly regulating commerce in another
state.” That would be the Commerce Clause. He also notes that states cannot
devise their own regulatory schemes that would trump the federal government’s
rules. The U.S. EPA has already been tasked with regulating greenhouse gas
emissions. He calls it an affront to the Constitution. He especially despises
the retroactive nature of the law as obnoxious and bold. Likening it to getting
a ticket for going 65 in a 55, but when the speed limit was still 65. He, and
21 other attorneys general, three energy trade associations, and one energy
company are suing. While I doubt any of those AGs are Democrats, I would ask
why Democrats would not join in these suits. It would be an opportunity for
Democrats to fight for sanity in government and reject such authoritarian measures
arising from their fringes. Unfortunately, it gives more credence to complaints
about Democrat elites making authoritarian rules, which is a legitimate
concern.
New York Post’s Jordan
McGillis argued in January 2025 that the law was not really like the EPA
Superfund Act, but a more arbitrary rule. The Manhattan Institute’s John
Ketcham described the planned doling out of money to well-connected unions,
disadvantaged communities, and special interest groups as “poorly defined
preferentialism.” According to Gillis:
“The new scheme styles itself in the fashion of the US
Environmental Protection Agency’s 1980 superfund law, but bears little
resemblance to that law in reality.”
“The EPA superfund holds polluters liable for the direct
environmental damage they have caused by releasing hazardous waste — harms that
are specified, local, particular, and attributable.”
“Big oil companies could be on the hook for tens of
millions of dollars for past fossil fuel pollution.”
“The climate superfund idea simply slaps retroactive
fees onto a group of companies that sold products the state no longer views
favorably. While in aggregate global fossil fuel use has amplified the
greenhouse effect, these companies have emitted just a sliver of the world’s
total.”
“The state can’t credibly say Company X’s emissions
caused damage Y, which is why it’s not troubling itself with this necessary
specificity.’
“The scheme doesn’t even hold the decision-makers from
the “covered period” accountable; it is today’s company shareholders who are on
the hook.”
The fees would extend to
international companies and national oil companies like Saudi Aramco, Russia’s
Lukoil, and Mexico’s Pemex. I doubt those companies would be willing to pay the
state of New York. It makes me wonder whether New York’s bungles in creating
greenhouse emissions when they didn’t have to would be included. This includes
things like burning high-emission fuel oil at power plants instead of local
natural gas, buying LNG from around the world, including the Russian Arctic,
instead of sourcing it from the vast Marcellus field nearby, and preventing
pipelines from being built that would lower greenhouse gas emissions compared
to some alternatives.
New York chose this law ahead
of a planned climate adaptation legislation, but hopes to use the funds
collected for that purpose
I believe the law will be
struck down in court, and hopefully, such draconian, authoritarian, and unfair
proposals will never be heard from again. The Democrats need to become smarter,
more pragmatic, and less extreme about climate and environmental concerns, as
these are hurting them. No one wants to live in a world where providing
affordable and in-demand energy is akin to a crime or subject to massive fines.
These kinds of attempts at punishment, not unlike the ridiculous climate
lawsuits that keep cropping up, really need to be nipped in the bud. I say,
stop the Bullshit!
References:
Sorry,
New York: West Virginia Won’t Clean Up Your Climate Mess. J.D. McClusky. New
York Post. July 25, 2025. Sorry,
New York: West Virginia won't clean up your mess
NY
weighs charging oil firms billions of dollars to fuel new climate change fund. Carl
Campanile. New York Post. August 18, 2024. Exclusive
| NY weighs charging oil firms billions of dollars to fuel new climate change
fund
New
York Passes Climate Superfund Legislation. V&E Environmental Update. Published
by Energy Law Report, July 2025. Vinson
& Elkins. March 6, 2025. New
York Passes Climate Superfund Legislation | Environmental | Insights | Vinson
& Elkins LLP
Albany’s
new fossil fuels ‘super-fund’ could hit consumers hard. Jordan McGillis. New
York Post. January 25, 2025. Albany's new fossil fuels
'super-fund' will hit consumers hard
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