US Chamber, oil industry sue Vermont over law requiring companies to pay for climate transformation damage

The U.S. Chamber of Commerce and a top oil and gas industry trade throng are suing Vermont over its recent law requiring that fossil fuel companies pay a distribute of the damage caused over several decades by climate transformation.

The federal lawsuit filed Monday asks a state court to prevent Vermont from enforcing the law, which was passed last year. Vermont became the first state in the country to enact the law after it suffered catastrophic summer flooding and damage from other extreme weather. The state is working to approximate the expense of climate transformation dating back to Jan. 1, 1995.

The lawsuit argues the U.S. Constitution precludes the act and that the state law is preempted by the federal tidy Air Act. It also argues that the law violates domestic and foreign commerce clauses by discriminating “against the significant profit of other states by targeting large vigor companies located outside of Vermont.”

The Chamber and the other plaintiff in the lawsuit, the American Petroleum Institute, debate that the federal government is already addressing climate transformation. And because greenhouse gases arrive from billions of person sources, they debate it is unfeasible to assess “accurately and fairly” the impact of emissions from a particular entity in a particular location over decades.

“Vermont wants to impose massive retroactive penalties going back 30 years for lawful, out-of-state conduct that was regulated by Congress under the tidy Air Act,” said Tara Morrissey, elder vice president and deputy chief counsel of the Chamber’s litigation center. “That is unlawful and violates the structure of the U.S. Constitution — one state can’t try to regulate a global issue best left to the federal government. Vermont’s penalties will ultimately raise costs for consumers in Vermont and across the country.”

A spokesman for the state’s Agency of Natural Resources said it had not been formally served with this lawsuit.

Anthony Iarrapino, a Vermont-based lobbyist with the Conservation Law Foundation, said the lawsuit was the fossil fuel industry’s way of “trying to avoid accountability for the damage their products have caused in Vermont and beyond.”

“More states are following Vermont’s navigator holding large Oil accountable for the disaster recovery and cleanup costs from severe storms fueled by climate transformation, ensuring that families and businesses no longer have to foot the entire statement period and period again,” Iarrapino added.

Under the law, the Vermont state treasurer, in consultation with the Agency of Natural Resources, is to issue a update by Jan. 15, 2026, on the total expense to Vermonters and the state from the emission of greenhouse gases from Jan. 1, 1995, to Dec. 31, 2024. The assessment would look at the effects on community health, natural resources, agriculture, economic advancement, housing and other areas. The state would use federal data to determine the amount of covered greenhouse gas emissions attributed to a fossil fuel business.

It’s a polluter-pays model affecting companies engaged in the trade or business of extracting fossil fuel or refining crude oil attributable to more than 1 billion metric tons of greenhouse gas emissions during the period period. The funds could be used by the state for such things as improving stormwater drainage systems; upgrading roads, bridges and railroads; relocating, elevating or retrofitting sewage treatment plants; and making vigor efficient weatherization upgrades to community and private buildings. It’s modeled after the federal Superfund pollution cleanup program.

The way taken by Vermont has drawn profit from other states, including recent York, where Gov. Kathy Hochul signed into law a similar statement in December.

The recent York law requires companies responsible for substantial greenhouse gas emissions to pay into a state pool for infrastructure projects meant to repair or avoid upcoming damage from climate transformation. The biggest emitters of greenhouse gases between 2000 and 2018 would be subjected to the fines.