On behalf of the New Jersey Business & Industry Association, the state’s largest association representing the job creators of New Jersey, we are submitting this testimony in very strong opposition to Senate Bill No. 3545, the so-called “Climate Superfund Act.” We ask this committee to vote no on this bill.
There are numerous reasons to oppose this legislation, which essentially imposes a new energy and utility tax on consumers at a time when affordability, especially for energy pricing, is the dominant concern of our state’s residents. These concerns are:
- Negative impacts on consumers;
- Unfairness of imposing a retroactive assessment;
- The impacts on jobs and the economy;
- The legislation ignores the necessity and benefits of fossil fuels;
- It is unconstitutional;
- The legislation sends the wrong message to the business community;
- It does nothing to address climate change or to promote decarbonization;
- The premise of the legislation is not supported by mainstream science; and
- It unfairly targets New Jersey companies over foreign entities.
Before we address the above concerns, it is important to go beyond the rhetoric of the advocates and understand the true intentions of this piece of legislation. Resiliency is a major concern for New Jersey. We are a coastal state that has experienced major storms for longer than humans have been recording those events. We need to be smart on how we protect our residents. NJBIA welcomes a conversation on resiliency strategies and how to pay for it.
However, this bill is not about resiliency. It is about trying to inflict enough economic harm on a vital industry so that investments will no longer be made, and fossil fuel refining and extraction no longer remains an attractive business model. Advocates first tried to get laws passed to ban the use of fossil fuels and failed. They next tried to bring lawsuits based on the same premises of this legislation, and they have also been failing. Now they are trying to use legislation in the guise of compensating for damages that do not exist in order to bankrupt legitimate, and vital businesses.
While the estimated $40 billion price tag of this legislation may not be enough to put companies out of business, efforts to pass Superfund laws are being pushed in at least a dozen other states. The cumulative impacts can be devastating. The tactic is obvious: what advocates could not accomplish through policy and have failed in the courts, they are now trying to do with a backhanded legislative effort. We need to be honest and have a conversation about the benefits and necessity of fossil fuels while we look for affordable and realistic lower carbon options.
Impacts to Consumers: This bill will add to the affordability crisis in New Jersey. Advocates have made the fanciful claim that the costs imposed on fossil fuel companies will not be passed on to consumers. This claim is patently false. While we do not know how much the State Treasurer may seek to assess under this bill, one of the prime sponsors believes the amount will be $40 billion. Advocates have recently claimed the amount is $50 billion. By imposing a multi-billion annual energy and utility tax against providers of gasoline and other fossil fuel products, to be paid over nine years, consumers will pay the cost. There will be higher prices at the pump for gasoline and even higher utility bills. The costs of consumer goods will also rise as the cost to deliver those goods will rise as fuel prices increase.
According to an analysis of the U.S. Chamber of Commerce, Institute for Legal Reform, assuming the $40 billion number, the cost to consumers is estimated to be, per household, over nine years:
- Transportation: $573 annually or $5,160 total;
- Utilities: $191annually or $1,720 total;
- Other cost impacts: $253 annually or $2,280 total.
- Total costs per household: $1,017 annually or $9,160 total.
Unfairness: It is fundamentally unfair to impose a retroactive assessment against companies that were not only providing a legal product, but a product that was and remains necessary for society and the economy. We will need fossil fuels for decades to come. Even Bill Gates, a longtime advocate of decarbonization efforts, recently conceded that we are many decades away from eliminating fossil fuels which remain necessary for a functioning economy and society. Furthermore, the bill would only impose these charges against companies that refined or extracted fossil fuels but not on the businesses and consumers who used these products.
Impact of Jobs: New Jersey is home to only two refineries. In North Jersey, the Phillips 66 plant in Linden and in South Jersey the Paulsboro Refining Company in Paulsboro. These two New Jersey refineries alone, contribute $8.4 billion to the national economy, pay $1.4 billion in state and local taxes, pay $4 billion in labor income, and support 35,700 jobs in the state. New Jerseyans annually consume 3.5 billion gallons of gasoline, 1.1 billion gallons of diesel and home heating oil, and 806 million gallons of jet fuel, all products that are produced right here in the Garden State. The economic significance of the Bayway Industrial Complex is detailed in a recent NJIT study (https://njbia.org/wp-content/uploads/2025/11/2025-Bayway-Project-FINAL.pdf).
Passage of this bill would put those jobs in jeopardy and harm the state and regional economy. Predicting that this bill would harm our two remaining refineries is NOT fear mongering. The East Coast used to be the home to about 14 refineries - we now have four left, with two in New Jersey. The threat to these refineries from this bill is real.
Ignores Benefits of Fossil Fuels: The bill is one sided in that it only looks at the assumed harm from the burning of fossil fuels, but it ignores the benefits. Modern society is run primarily on fossil fuels. Over the last century, fossil fuel energy has resulted in more than a doubling of life expectancy and an extraordinary decrease in extreme poverty and hunger, even as the world’s population increased by over 6 billion people. In New Jersey, fossil fuels account for nearly all of the energy used in transportation, over 80% of the energy to heat our homes, and about 80% of the energy used to run our factories and office buildings. The necessity of fossil fuels for human well-being is obvious and overwhelming. There currently is no adequate and affordable substitute.
Unconstitutional: If enacted, this law would likely be struck down on constitutional grounds. Not only does it seek to impose retroactive liability for previously legal actions, but courts have consistently found, in similar cases brought against fossil fuel companies, that the issues presented are ones of national and even international jurisdiction, and state laws should not govern. Passing this law will be a waste of time and money. New Jersey has better things to do with its revenues than to spend millions of dollars defending an unconstitutional law.
Message to Business Community: Attempting to hold businesses liable for activities that not only were legal, necessary for society, and even encouraged by government, sends a message to the business community that no company is safe from retroactive liability if they do business in New Jersey. Plus, even though this bill is limited to past activities, there is no guarantee that the state would not pass a similar law again for future activities. Passage of this legislation would send a message to the business community that you do business in New Jersey at your own risk, even if you follow every applicable law. It would make an already challenging business climate even worse.
Does nothing to impact climate change: New Jersey contributes just 1.7% of the United States’ GHG emissions and only 0.3% of worldwide emissions. Trying to impose climate policies from Trenton will have absolutely no impact on total emissions or on climate change. This bill will only impose large costs on New Jersey consumers and taxpayers without any benefit to the environment. We should focus our attention on real solutions.
Not supported by science: While this bill is premised on the presumption that New Jersey has experienced compensable harm from the impacts of climate change, the mainstream scientific understanding does not support this finding. The Intergovernmental Panel on Climate Change (IPCC), established by the United Nations, is considered the “gold standard” in compiling the latest studies and knowledge on climate change and its impacts. In its most recent report (AR6), the IPCC found that anthropogenic climate change has increased temperatures by about 1.2 degrees Celsius, and, as a result, we are experiencing a minor increase in heat waves and heavier rainstorms. However, it also found no evidence that we are experiencing GHG influenced increases in hurricanes, tornadoes, floods, fires, or most types of droughts. Sea level rise from climate change has also not impacted the state. Without a showing of actual damages caused by fossil fuels, there is no basis for this legislation. Yet, despite the lack of any scientific evidence of damages in New Jersey, the proponents of the legislation believe the retroactive assessment will be about $40 to $50 billion.
Benefits foreign companies over state and United States companies: By linking liability to the requirement to be subject to New Jersey sales tax, the bill, in effect, exempts major foreign corporations from liability while holding New Jersey and national companies liable for the total amount of the costs being imposed. Some of those foreign corporations are responsible for the largest amount of GHG emissions. This would unfairly burden American companies and benefit foreign companies.
For all the above reasons, this legislation should not move forward.
