Iowa, Missouri Sue Over NY's GHG Rule

LINCOLN, Neb. (DTN) -- Iowa and Missouri have sued the state of New York arguing its greenhouse gas emissions reporting rule lets the state regulate farmer's end markets for corn and soybeans from 1,200 miles away.

The rule established by New York in 2019 requires ethanol and biodiesel plants to track and report climate emissions tied to gallons produced that end up in New York.

New York enacted a law requiring GHG emissions reductions by 2030 and 2040. Though the rule does not set emissions limits, it does impose reporting and compliance obligations to allow New York to gather data to later use to create emissions-reductions regulations.

In a new lawsuit filed in the U.S. District Court for the District of Eastern Missouri on May 14, 2026, the states of Iowa and Missouri allege the reporting rule violates the U.S. Constitution.

"New York treats global climate change like a local issue, and its latest attempt to regulate greenhouse gas emissions, including activity and emissions occurring outside of New York, violates core constitutional principles," the states said in the lawsuit.

As was the case in lawsuits filed against California's animal welfare law created because of Proposition 12, Iowa and Missouri argue the state of New York is attempting to regulate activity that occurs entirely outside its borders.

The Supreme Court has established that states may only exercise authority over people and property within the limits of their own territory.

The new lawsuit alleges New York's reporting rule is violating the Dormant Commerce Clause, the Due Process Clause and the states' sovereignty.

The complaint details what it says are real-world costs imposed on businesses outside of New York.

For every ethanol and biodiesel plant, the complaint said annual compliance costs range from $17,500 to $91,000 per facility, as well as $4,000 to $17,000 per year, and any costs for maintaining records for five years including 10 years for larger emitters.

New York's reporting law also carries civil and criminal enforcement penalties, even for inadvertent reporting errors.

"Ethanol and biodiesel suppliers are likely to know with reasonable precision the quantity of fuel sold to one of their customers," the lawsuit said.

"But they are far less likely to know how much of that fuel, after one or more downstream transactions, ultimately ends up in New York. If plaintiffs' fuel suppliers must comply with the GHG Rule, their estimates for this potentially unknowable quantity of liquid fuel are subject to a relatively narrow margin of error, potentially making the GHG Rule extremely punitive."

What's more, the lawsuit said nearly every ethanol plant and every biodiesel plant in the country has a production capacity of more than 500,000 gallons per year -- meaning the entirety of both industries qualify as large emissions sources, according to the state of New York.

The complaint said the GHG reporting rule "imposes compliance costs and carries the potential for ruinous fines, criminal penalties and even inspections and injunctions of biofuels production and distribution in Iowa and Missouri."

Iowa and Missouri said on top of the reporting burden, the New York rule essentially removes confidentiality from biofuels producers when it comes to their business data.

This means information that may be commercially sensitive is made public without recourse, according to the lawsuit.

What's more, the state of New York claims it has the authority to search biofuels plants outside of its state borders.

"New York asserts a right of warrantless inspection of property where 'representatives may traverse the property, inspect facilities, take measurements, analyze physical site characteristics, take environmental samples, sketch and photograph the property and conduct other activities necessary to evaluate emissions,'" the lawsuit said.

"The GHG rule does not provide any such opportunity for pre-compliance review before a search is conducted and therefore violates the Fourth and Fourteenth Amendment rights of the regulated parties."

Todd Neeley can be reached at todd.neeley@dtn.com

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