Hochul signs a bill that will charge energy companies $75B, but critics say customers will actually pick up the tab.

Today New York Governor Kathy Hochul signed into law the Climate Change Superfund Act, which will tax oil and gas firms an estimated $75 billion over the next 25 years. The controversial measure, sponsored by Senator Liz Krueger and Assemblyman Jeffrey Dinowitz, is challenged by federal and state superfund laws, which tax firms suspected of polluting.

While environmental groups announced the law, business groups argued that it would increase the cost of doing business in the state and that consumers would end up bearing the brunt of higher electricity prices.

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“The Climate Change Superfund Act is now law,” said Senator Krueger. “For most of the last decade, courts have dismissed cases against the oil and gas industry on the basis that the issue of climate liability should be decided by legislatures. However, the New York State Legislature – the 10th largest economy in the world – has accepted the invitation, and I hope we've made it clear: polluters the world's largest meteorologists are uniquely responsible for creating the climate crisis, and they must pay their fair share to help ordinary New Yorkers cope and the consequences.”

However, critics saw the bill as ineffective and said it would face long-term challenges.

“What would you like them to do? Not sell oil in New York State,” said Ken Pokalsky, vice president of the New York State Business Council.

New York State Sen. Liz Krueger, D-Manhattan. (Getty)

A group of business and industry leaders also criticized the move: “This law is bad public policy that raises significant implementation questions and constitutional concerns. In addition, its $75 billion cost will lead to unintended consequences and increased costs for households and businesses.”

However, Gov. Hochul declared the law a victory for the state's citizens, saying the money would be used for climate mitigation efforts.

“This bill would allow the state to recover $75 billion from major polluters… New Yorkers have long borne the cost of the climate crisis, which affects every part of the state.”

The bill will lead to significant checks on domestic and foreign energy producers, with Saudi Arabia's Saudi Aramco likely to face a hefty fine of $640 million a year, while Mexico's state-owned company Pemex will be looking at an annual charge of $193 million.

Russia's Lukoil could face lawsuits of up to $100 million a year.

The assessment is based on estimated annual CO2 emissions, measured in millions of tonnes of greenhouse gases.

In total, 38 firms deemed carbon polluters will be on the road, including US oil giants Exxon and Chevron, the UK's Shell and BP, and Brazil's Petrobras.

Critics of the law also noted potential difficulties in collecting the tax imposed on foreign companies.

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The bill also deals with consumer advocacy groups considering their use in conjunction with other new measures that could significantly affect passengers and consumers:

“We also note that this move will follow the restoration of congestion pricing in New York City, and ahead of the Department of the Environment's pending 'cap and invest' legislation, which will put billions of dollars into new fossil fuel exploration. fuel consumption, which affects a variety of consumers,” said opponents of the bill.