Oil giant Shell is to create a separate division focused on renewable energy and low carbon projects.

Dubbed ‘New Energies’, it will bring together hydrogen, biofuels and green projects such as wind and solar.

According to Shell’s CEO Ben van Beurden, the firm has invested $1.7 billion (£1.1bn) in the new division and are currently spending around $200m (£138m) a year to explore and develop new energy opportunities.

He added: “Shell has invested in renewables, such as wind, solar and biofuels for many years but New Energies is more than traditional renewables. The theme spans the digital revolution, more electrification, especially in transport, more customers with more choice on energy mix.

“It’s an exciting and fast moving landscape. We’ve made the decision that Shell will build on its existing foundations in renewables and put a lot more emphasis on New Energies going forward.”

The announcement follows a report by the Carbon Tracker Initiative which stated big oil and gas companies could be collectively worth $100 billion (£69bn) more if they align their investment plans with the 2˚C target.

Last month, Shell unveiled a new car which it claims could help deliver material reductions in energy use in the road transport sector.