Major fossil fuel companies will be required to hand over billions of dollars to help pay for New York State’s efforts to fight climate change under a new law signed by the governor Thursday.

Governor Hochul signed the Climate Change Superfund Act, creating a new requirement that companies seen as responsible for the majority of carbon emissions between 2000 and 2024 will have to pay roughly $3 billion a year for the next 25 years. 

The funds will be used to pay for new infrastructure meant to withstand the impacts of more flooding or more extreme weather some blame on climate change. The funds would also be used to pay for repairs to damage caused by extreme weather events. 

In a statement, Ms. Hochul said, “With nearly every record rainfall, heat wave, and coastal storm, New Yorkers are increasingly burdened with billions of dollars in health, safety, and environmental consequences due to polluters that have historically harmed our environment.

“Establishing the Climate Superfund is the latest example of my administration taking action to hold polluters responsible for the damage done to our environment and requiring major investments in infrastructure and other projects critical to protecting our communities and economy,” she added.

A New York state senator, Liz Krueger, celebrated the law and said the state “has fired a shot that will be heard round the world: the companies most responsible for the climate crisis will be held accountable.”

Fossil fuel and business groups opposed the implementation of the law. The American Petroleum Institute said it “represents nothing more than a punitive new fee on American energy, and we are evaluating our options moving forward.”

Meanwhile, the Business Council of New York State and more than 30 other business organizations urged Ms. Hochul to veto the bill earlier this month.

The groups argued that it “targets sellers of fossil fuels while ignoring users as a contributor to emissions” and said the law would “certainly face a long and costly legal challenge.”

New York’s law will not go into effect immediately as officials still have to develop a system to identify which companies they believe are the largest emitters and provide them notice that they must pay.

Vermont enacted a similar law in June that requires “compensatory” payments from fossil fuel companies that Vermont’s Agency of Natural Resources determines were responsible for more than 1 billion metric tons of carbon emissions between 1995 and 2024. 

California, Maryland, and Massachusetts also have proposed similar laws. The bills are modeled on the federal Superfund law that requires companies to pay for the cleanup of toxic waste.