New York’s Climate Change Superfund Act Explained
New York State has decided to take proactive measures to protect itself and its citizens against the effects of climate change. State lawmakers estimate that the measures, which will include upgrades to infrastructure (for example, roads and sewer systems), will be expensive — hundreds of billions of dollars through 2050 — and well beyond the state’s ability to pay.
As a result, the Empire State plans to create a Superfund to finance its climate-related projects, and it intends for the Superfund to be financed in part by the very companies the state feels are most responsible for climate change: large fossil fuel companies that have been putting greenhouse gas emissions into the atmosphere. The creation and “polluter pays” aspect of the Superfund are set out in the New York Climate Change Superfund Act (the Superfund Act), which was signed into law on December 26, 2024, by New York Governor Kathy Hochul. It became effective on that date.
The New York Superfund Act, which is the second of its kind to be passed in the U.S. (Vermont passed the first a few months before New York), is under legal challenge in an action brought by the attorneys general of 22 conservative states. They claim the Superfund Act violates provisions of both the U.S. and New York constitutions. (Vermont’s law is also under legal attack.)
Many will be watching to see whether the New York and Vermont Superfund laws survive, and their fate will no doubt influence how other states (and the federal government) handle issues of climate change, particularly with regard to “polluter pays” laws such as New York’s. Currently, five other states are considering similar laws, and senators from Maryland and New York have introduced a federal climate Superfund bill.
The New York Climate Change Superfund Act: An Overview
New York's Act creates a climate Superfund that will finance New York State-based projects designed to increase the Empire State’s resilience against climate change-related events such as flooding, severe heat, and other extreme weather conditions.
Under the Act, companies that have contributed significantly to greenhouse gas (GHG) emissions will be required to contribute to the Superfund. Specifically, the Act requires those fossil fuel companies that produced over 1 billion metric tons of GHG emissions during a certain period to pay, collectively, $75 billion to New York State over the next 25 years, regardless of whether those companies currently operate in the Empire State.
Key Features of the New York Superfund Act
Climate Change Adaptation Cost Recovery Program: The New York Superfund Act establishes the climate change adaptation cost recovery program, which will issue demands to, and collect money from, a list of “responsible parties.” A “responsible party” is defined under the Act as any entity “which, during any part of the covered period [1/1/2000–12/31/2018], was engaged in the trade or business of extracting fossil fuel or refining crude oil and is determined to be responsible for more than 1 billion tons of covered greenhouse gas emissions.” Only those companies without a sufficient connection with the state “to satisfy the requirements of the United States constitution” will evade liability.
Strict liability for polluters: The cost recovery program will operate under a strict liability theory, which means a company that produced GHG emissions during the covered period is automatically liable, regardless of whether they intended to cause harm.
Infrastructure projects to be paid for by the Superfund: According to the Act’s legislative findings, which are located at the beginning of the Act, the Superfund will finance projects intended to “avoid, moderate, repair, or adapt to negative impacts caused by climate change, and to assist communities, households, and businesses in preparing for future climate change-driven disruptions.” Anticipated infrastructure projects include:
Coastal wetlands restoration
Stormwater drainage upgrades
Defensive upgrades to roads, bridges, subways, and transit systems
Energy-efficient cooling systems in buildings (including schools and public housing)
Supporting programs that address climate-driven public health issues
Preparation for extreme weather events
Why New York Introduced the Act
As explained in the Act’s legislative findings section, New York lawmakers created the Act to address the following conclusions and concerns:
Climate change poses a threat to quality of life in New York. Lawmakers found that climate change, which has resulted in large part from fossil fuel combustion, poses “an immediate, grave threat to the state’s communities, environment, and economy” and that responsive action is required by the state, including:
Mitigating further GHG buildup
Adapting to certain irreversible consequences of climate change, such as:
Rising sea levels
Increasing temperatures
Extreme weather events
Flooding
Toxic algal blooms
Climate change response, including new/upgraded infrastructure, is needed. Lawmakers determined that to maintain quality of life for current and future New York residents, the state will have to make significant investments in new and upgraded infrastructure, including the types of projects listed in the Key Features subsection above.
Climate change response/infrastructure is costly. As detailed in the legislative findings, the New York legislature estimates the necessary infrastructure projects will cost several hundred billion dollars through 2025, with the New York City sewer upgrades alone estimated at $100 billion. Also included in the legislative findings is the estimate that cities outside New York City have dedicated, or will dedicate, 55% of their spending to climate change.
Those who are responsible for climate change should pay — similar to other polluter pay programs. Lawmakers point out that New York already has programs in place to address hazardous waste and oil spills, under which the companies responsible for the environmental damage must pay for the cleanup.
Science allows the determination of who has produced the most GHG emissions. New York lawmakers have found that it's now possible to determine “with great accuracy” the share of GHG released into the atmosphere by specific companies over the past seven decades, which makes it feasible to assign pro rata responsibility and financial liability. There is robust scientific data to show who the worst actors were during the covered period of 2000–2018.
The companies responsible for the most GHG emissions have money to pay. Empire State lawmakers have also found that the three largest domestic oil and gas producers showed a combined profit of $85.6 billion in 2023.
How the Act Works
Who Pays, and How Much?
“Responsible parties” (defined above) will be required to pay based on their proportionate share of pollution, as determined by specific calculations provided in the Act.
Where Will the Money Go?
The Act establishes a climate change adaptation cost recovery fund, which is to be kept separate from other state accounts.
When Will the Act Be Implemented?
Within one year of the effective date (December 26, 2025), the New York Department of Environmental Conservation will issue regulations related to the Act, including:
Adopting methods to determine who the responsible parties are and their applicable share of GHG emissions
Registering entities deemed to be responsible parties
Issuing notices of cost recovery demand to responsible parties
Accepting payments from responsible parties
Adopting procedures to identify and select infrastructure projects to be funded under the Act
Legal Challenges to the New York Climate Superfund Act
As noted above, on February 6, 2025, a coalition of attorneys general from 22 conservative states and several industry associations filed suit against the state of New York, challenging the legality of the Act on a number of bases, including federal preemption (i.e., the Act is preempted by the federal Clean Air Act) and violations of both the U.S. and New York constitutions. Some of the specific arguments set out in the suit include:
Federal preemption: The Act is preempted by federal law (Clean Air Act).
Supremacy Clause: The Act infringes on the equal sovereignty of plaintiff states.
Commerce Clause and Foreign Commerce Clause violations: The Act discriminates against out-of-state energy producers and imposes penalties that burden interstate commerce to benefit local NY interests.
Due process: The Act retroactively imposes extreme penalties without sufficient notice or justification.
Equal protection: The Act discriminates against large out-of-state producers of coal, oil, and natural gas to benefit NY interests.
Excessive fines: The Act is in violation of the Eighth Amendment.
Takings Clause: The Act requires out-of-state energy producers to pay for NY programs.
Due Process Clause of Article One, Section 6 of NY Constitution: The Act is retroactive and arbitrary.
Takings Clause of Article One, Section 7 of NY Constitution: The Act compels energy producers to fund state projects without just compensation.
Superfund Legislation in Other States
As mentioned above, Vermont’s Superfund law, which went into effect before New York’s, is also under legal challenge. That case was brought by the U.S. Chamber of Commerce and the American Petroleum Institute, who assert claims similar to those in the New York action.
Five other states (Massachusetts, Maryland, Maine, New Jersey, and California) have proposed (but not yet passed) their own versions of polluter-pay Superfund acts.
In addition, a federal Superfund Act has also been introduced. In September 2024, senators from Maryland and New York introduced the federal “Polluters Pay Climate Action Fund,” which would create a national framework for climate liability. That bill has not advanced past committee, and given that Republicans currently have a majority in Congress, it’s unlikely to make it out of committee or to subsequently be signed by President Donald Trump.
The Future of Climate Superfund Laws: Unpredictable
It remains to be seen what will happen with New York’s Climate Superfund Act, as well as similar polluter-pay acts passed in Vermont and proposed at the state and federal levels. The fate of other climate action laws under legal challenge, such as California’s Climate Accountability Package and the SEC Final Rule on climate reporting, is also unknown.
Future lawyers, particularly those specializing in environmental and corporate law, will want to stay up to date on this area so they can best advise their clients as to which laws apply to their businesses.
Stay up to date on the latest legal developments in California, Connecticut, Indiana, and the rest of the nation with Purdue Global Law School.
Purdue Global Law School offers full-time and part-time online Juris Doctor programs. Graduates of our JD program are academically eligible to sit for the California or Connecticut bar or, with an approved petition, the Indiana bar. If you wish to advance your legal education but do not intend to become a practicing attorney, you may consider an online Executive Juris Doctor.
Single law courses are also available to help you explore a particular area of law without committing to a full degree program. Request more information today.