Iowa, Missouri Sue New York over Biofuel Rule, Cite Higher Fuel Costs

May 18, 2026

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by Donnelle Eller (Des Moines Register/AOL) Iowa and Missouri are suing to block an edict by New York requiring their and other ethanol and biodiesel producers to report how much of the renewable fuel might be sold in the state.

The Iowa and Missouri attorneys general call the reporting requirements, part of New York’s efforts to cut greenhouse gas emissions that contribute to climate change, an “unconstitutional attempt to regulate businesses, consumers and individuals beyond its borders.”

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“By forcing a radical green agenda through unrealistic reporting requirements on any biofuel that may unknowingly end up in New York, these unelected bureaucrats are putting excessive financial requirements on producers. That means higher costs of fuel for Iowans and all Americans,” (Iowa Attorney General Brenna) Bird said.

The Center for Individual Rights, a Washington, D.C.-based public interest law firm, filed the lawsuit Thursday in the U.S. District Court for the Eastern District of Missouri on behalf of Bird and Missouri Attorney General Catherine Hanaway. Also joining as a plaintiff is the American Free Enterprise Chamber of Commerce, an Ankeny-based group whose board members include Terry Branstad, former Iowa governor and U.S. ambassador to China.

The groups say the New York regulation requires all U.S. ethanol and biodiesel manufacturers and distributors to "register with the New York State Department of Environmental Conservation and report the amount of liquid fuel that might be used or sold in the Empire State."

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In 2019, New York enacted a law requiring considerable reductions in the state’s greenhouse gas emissions over the following two decades, according to the lawsuit.

“The law did not specify how those reductions would be achieved. Rather, it directed New York’s environmental agency to issue regulations supplying those details," the lawsuit says. "Those emissions reduction regulations have not yet been issued.”

But New York did issue greenhouse gas reporting regulations in December. The suit says the state intends to use the data "to create regulations for reducing New York’s greenhouse gas emissions considerably by 2030.”

The first Mandatory Greenhouse Gas Reporting Program reports are due June 1, 2027.

Complying could cost up to $91,000 annually, per plant

New York estimates the cost to meet the reporting requirement will be between $17,500 and about $91,000 per facility annually. And the rule allows New York officials to “enter and inspect a reporting entity’s property without notice" and impose civil and criminal penalties, the lawsuit says.

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Iowa and Missouri’s attorneys general ask that New York’s reporting program be halted because it would preempt the federal Clean Air Act, which regulates interstate greenhouse gas emissions, and violates the constitutional restrictions on regulating activities outside a state's borders, among other issues.

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American Free Enerprise Chamber CEO Gentry Collins said in a statement that Iowa and other biofuel producers "already abide by the state regulations where production occurs." READ MORE

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Iowa, Missouri Sue Over NY's GHG Rule -- Biofuel States Push Back: Lawsuit Challenges New York's Greenhouse Gas Reach Into Corn Country (DTN Progressive Farmer)
Iowa and Missouri Tell New York to Keep Its Climate Rules at Home (Red State)

Excerpt from DTN Progressive Farmer: 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.

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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."

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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." READ MORE

Excerpt from Red State:

Iowa Attorney General Brenna Bird and Missouri Attorney General Catherine Hanaway renewed their case Wednesday in a joint op-ed, putting the constitutional principle plainly:

"One state's authority ends where another state's sovereignty begins."

Bird and Hanaway argue New York's greenhouse gas reporting rule can reach producers in their states simply because that fuel is later sold in New York, even when the producer never sold it there directly.

Iowa, Missouri, and the American Free Enterprise Chamber of Commerce filed suit May 14 in federal court in Missouri. They're targeting the two New York officials responsible for enforcing the rule: Attorney General Letitia James and Department of Environmental Conservation Commissioner Amanda Lefton.

New York finalized its Mandatory Greenhouse Gas Reporting Program on December 1, 2025. The first reports are due June 1, 2027.

But the clock was already running. Covered businesses were required to begin collecting emissions data on January 1, 2026.

The rule casts a wide net. It reaches producers and distributors of ethanol and biodiesel whose fuel eventually reaches a buyer in New York, even companies that produced or initially sold the fuel somewhere else entirely.

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That is not a hypothetical edge case. Ethanol produced in Iowa routinely passes through multiple distributors, terminals, blending facilities, rail cars, and trucks before arriving at a New York gas station. The plant that made it may have had no say in where it ended up.

The price tag is steep: New York estimates annual compliance costs of $17,500 to more than $91,000 per facility. Larger facilities face an additional $4,000 to $17,000 per year for mandatory outside verification.

Miss a deadline or submit an incomplete report? Every single day counts as a separate violation, with civil fines up to $8,000 per day or criminal penalties including jail time. New York regulators can also show up and inspect your property, and under the rule, businesses have no real way to challenge that inspection before it happens.

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Iowa's biofuels industry is not a rounding error. The state's 42 ethanol plants produced about 4.6 billion gallons in 2025, roughly 28 percent of the national total, supporting more than 31,000 jobs and generating over $5.6 billion in state GDP.

Its eight biodiesel plants rank first in the nation. Missouri ranks thirteenth in ethanol and second in biodiesel, with six and five plants respectively.

The lawsuit alleges New York's green regulatory overreach violates constitutional limits on state regulation outside its borders, conflicts with the federal Clean Air Act, targets businesses without sufficient ties to New York, and authorizes inspections that violate the Fourth Amendment.

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New York can regulate companies doing business in New York. Bird and Hanaway argue that does not give Albany authority over a Midwest plant simply because its fuel may later cross the state line.

If courts allow this kind of jurisdictional reach to stand, there is no principled stopping point: every state could claim the right to regulate businesses anywhere in the country based on where products eventually end up READ MORE