The new entity will be launched this year and be operationally separate within the Drax Group and headquartered in Houston in the United States, Drax said.
It will be led by Laurie Fitzmaurice, a senior energy infrastructure expert with nearly 30 years of experience in business development, most recently for Amazon Web Services.
"The creation of this business brings to life years of hard work by many outstanding people across our group and marks another step in Drax's journey to enable a zero-carbon, lower-cost energy future," said Drax Group CEO Will Gardiner.
"Our recent success is grounded in providing secure, renewable energy and our future is focused on playing a critical role in tackling climate change through the generation of secure, renewable power and the large-scale removal of carbon dioxide."
Britain last year laid out plans to boost energy security and independence by investing in efforts to move towards cleaner, more affordable energy sources, including projects to capture and store carbon dioxide.
Last week Drax said the government had approved its planning application to convert two biomass units at its Drax plant to use carbon removal technology known as bioenergy with carbon capture and storage (BECCS).
(Reporting by Marwa Rashad; Editing by David Goodman)
