The trade group represents General Motors Corp Toyota Motor Co Ford Motor Co Chrysler LLC and other companies. GM and Chrysler's predecessor Daimler-Chrysler and Vermont auto dealers initiated the case in 2005.

US District Court William Sessions in Burlington ruled in September that federal regulations did not preempt a state law that would require a 30 percent reduction in carbon emissions by cars and light trucks starting with 2009 models.

Vermont, Connecticut, Maine, Massachusetts, New Jersey, New York, Oregon, Rhode Island and Washington adopted the rule, which must be approved by the US Environmental Protection Agency (EPA).

Several states are considering the measure and watching legal developments closely. Cases are pending in California and Rhode Island. The Vermont challenge was the first to go to trial.

Sessions also rejected industry's claim that the Vermont measure would hurt their business.

But industry pressed ahead with its notice of appeal on Friday that was filed with the district court in Burlington. The case now shifts to the 2nd Circuit Court of Appeals in New York.

Dave McCurdy, the auto alliance chief executive, said in a statement that Vermont's regulation is tantamount to a fuel efficiency standard and "federal law is very explicit: states are preempted from adopting fuel economy laws."

"This appeal is urgent as this legislation applies to model year 2009 vehicles, which consumers will start seeing in early 2008 - just a few months from now," McCurdy said.

The Vermont attorney general's office had no comment on the appeal motion, which was anticipated.

But in September, state Attorney General William Sorrell called Sessions' ruling a "big win" for "those concerned about a healthier environment."

Concerned about energy security and high gasoline prices, Congress is considering a new fuel economy standard in Senate-passed energy legislation.