Enemalta has dropped controversial plans to refurbish two boilers at the Delimara power station using EU funds.

The plans had been contested by the European Commission, which last year launched a state-aid investigation to establish whether it constituted unfair competition.

Enemalta had planned to modify the boilers to produce less harmful emissions, such as sulphur dioxide and dust. It was to use €15.5 million in EU funds, along with a commercial loan of €2.8 million to complete the project.

"The Maltese Government has withdrawn its State aid notification to the European Commission on the Environmental Project for the Delimara Power Station as the project will no longer be carried out," the government said.

"The project will no longer be carried out because the aims of the project have been reached in other ways, particularly through Enemalta's sourcing of cleaner fuels. This has made it possible for the Delimara Power Station to improve its environmental performance"

The EU funds will be used for other projects.

Under EU rules, member states are only allowed to subsidise such projects up to 15 per cent of the costs. Malta was planning to subsidise Enemalta's project to the tune of 85 per cent of the costs.