(Adds background) NAIROBI, Nov 14 (Reuters) - Delegates at a U.N.-backed climate change conference have deferred a deal to allow new refrigerant plants in China and India to get lucrative funding under the Kyoto global warming pact, a U.N. official said. "China, Brazil, Argentina and the European Union could not reach agreement," the official said on Tuesday, adding the next conference in 2007 would take up the issue. Existing refrigerant plants produce as a by-product the super greenhouse gas HFC 23, but under Kyoto carbon trading rules factory owners can sell lucrative carbon credits by destroying this gas. It was the extension of these rules to new plants that delegates at the 189-country climate change conference in Nairobi could not agree on. Kyoto sets rich countries limits on emissions of greenhouse gases, but allows them to meet these targets by funding cuts in developing countries, spawning a carbon trade worth $5 billion in the last 20 months. The destruction of HFC 23 has been by far the most lucrative of such trades. For example, the World Bank pocketed some 25 million euros ($32 million) in management fees alone this summer for arranging two landmark HFC 23 deals in China, where factories pledged to destroy some 130 million tonnes of greenhouse gases in an 800 million euro deal. The sticking point on a deal for new plants was that these factories also produce HCFC 22, a gas which damages the earth's ozone layer, something which a separate pact, the Montreal Protocol, is meant to stop. Some delegates believed that Kyoto should not effectively give factories incentives to produce HCFC 22 by funding HFC 23 destruction. "That goes against the Montreal Protocol," said the official.
