Iowa and Missouri Tell New York to Keep Its Climate Rules at Home

New York is demanding emissions data from ethanol and biodiesel plants hundreds of miles outside its borders, plants that may have no idea their fuel ever crossed into the Empire State. Iowa and Missouri are fighting back in federal court.

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.

“New York bureaucrats cannot tell Iowa farmers and ethanol and biofuel producers how to do their job or what regulations they need to follow,” Bird said when the lawsuit was filed.

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.

New York brushed off similar objections during the rulemaking process. Rather than directly deny that the rule applies extraterritorially, Albany's climate bureaucrats offered a non-answer: the program is "constitutional and necessary." James' office did not respond to a request for comment when the lawsuit was filed.

The plaintiffs are demanding the court strike down the reporting program or block New York from applying it to Iowa, Missouri, American Free Enterprise Chamber members, and conduct occurring outside the state.

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

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