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To reveal the nature of CO₂ reduction to formate with high efficiency by in situ hydrogen produced from hydrothermal reactions with iron, DFT calculations were used. A reaction pathway was proposed in which the formate was produced through the key intermediate species, namely iron hydride, produced in situ in the process of hydrogen gas production. In the in situ hydrogenation of CO₂, the charge of H in the iron hydride was −0.135, and the Fe–H bond distance was approximately 1.537 Å. A C-H bond was formed as a transition state during the attack of H^δ− on C^δ+. Finally, a HCOO species was formed. The distance of the C-H bond was 1.107 Å. The calculated free energy barrier was 16.43 kcal/mol. This study may provide new insight into CO₂ reduction to formate in hydrothermal reactions with metal.