CO2 gas has been used as a feedstock to demonstrate the effectiveness of direct CO2 electrolysis for the generation of value-added carbon products from problematic greenhouse gas. Iron-based materials act as low-cost catalysts in the synthesis of graphitic carbon in several electrochemical applications for conversions of CO2 to carbonaceous substances, however limited attention has been given to the influence of this abundant material on deposition outcomes. It was therefore the aim here to observe cathodic behaviour of iron in a high-temperature electrolysis system and compare its performance with an alloyed iron (stainless steel) cathode. In this work, a eutectic ternary (Li, Na, K)2CO3 electrolyte at a mild temperature of 600 °C has been used as the reduction process medium while capturing CO2 to regenerate carbonate. The electrolytic carbon products have been extensively characterized by different tests to determine physical and chemical properties of products formed. The impact of temperature and thermal cycling of electrolytes on the electrodeposition process have also been studied. Carbon with magnetic properties has been synthesized using a bulk iron cathode at a temperature of 600 °C, while employing alloyed iron inhibited the formation of magnetic carbon in similar experimental conditions. The mechanism of magnetic carbon formation on a bulk iron cathode has been explained to result from in-situ iron oxide formation on the surface of the cathode which is subsequently reduced to iron metal under reduction potential and subsequent inclusion of iron with the carbon products. This study provides a single-step process for synthesizing valuable magnetic carbon which not only used CO2 as the feedstock during its formation but has multiple value-added material applications.