A group of businesses and trade groups is suing to block a new law signed by Governor Hochul in New York that requires fossil fuel companies to pay $75 billion for their carbon emissions.

The lawsuit targets the state’s Climate Change Superfund Act, which was signed into law late last year by Ms. Hochul. The law requires companies that the state determines are responsible for the majority of carbon emissions to pay into a fund that ostensibly will be used to pay for new infrastructure designed to withstand extreme weather events blamed on climate change. 

However, the plaintiffs argue that the law should be ruled unconstitutional and struck down. They also say that federal law prevents New York from finding fossil fuel companies that operate outside the state liable for the alleged impacts of their carbon emissions inside the state. 

Additionally, they say that the roughly 38 companies that have been identified as polluters and would be forced to pay would not be able to do so without passing on costs to consumers in the form of price increases. 

Twenty-two states have also sued New York over the climate law.

Plaintiffs in the lawsuit include the U.S. Chamber of Commerce’s Global Energy Institute, the New York State Business Council, the American Petroleum Institute, and the National Mining Association.

The president of the Global Energy Institute, Marty Durbin, said in a statement about the lawsuit, “Reliable, affordable energy helps power economic growth and enhances the quality of life for American families and communities. It defies logic that New York would pursue massive retroactive penalties from companies who are meeting consumer and business demand for this essential resource.

“This law is not only illegal and misguided, but it will likely increase the cost of energy, placing an unnecessary burden on New Yorkers and consumers nationwide, especially during a time of already high prices,” he added.  

He also argued that the issue is “a global issue best left to the federal government.”

An analysis of the law conducted for its sponsors estimated that companies would have to collectively pay about $3 billion annually for 25 years. It provided an example of the type of fees companies could be required to pay. The Saudi Arabia-based Saudi Aramco could be fined $640 million a year, the largest annual fee ever for a company. Meanwhile, the state-owned Petroleos Mexicanos could be forced to pay $193 million annually.

It is not clear how the state intends to collect fees from companies not based in America. A former chairman of the state Public Service Commission, John Howard, told the New York Post that he did not see a “mechanism” in the law to force foreign-based companies to pay up. 

Some of the other companies that were identified as polluters in the analysis include Exxon, Chevron, Shell, and BP. Shell and BP are also foreign companies based in the United Kingdom.

The chairman of the New York GOP, Ed Cox, said in a statement about the lawsuit, “This ‘climate’ law forces an outrageous $75 billion in new fees, which will ultimately be paid by consumers and businesses, driving more productive citizens and businesses from our state. From skyrocketing gas prices to higher heating bills, New Yorkers are already stretched thin, and now Hochul’s new ‘green’ agenda threatens to push them over the edge.

“The plaintiffs are right to call this law illegal and misguided: it’s a reckless overreach that prioritizes ideology over the economic well-being of our citizens. Under Kathy Hochul, New York continues to hemorrhage affordability, chasing away jobs and residents with every new burdensome tax and regulation,” Mr. Cox said.