The thermochemical conversion of CO2 into methanol, a process known for its selectivity, often encounters a significant obstacle: the reverse water gas reaction. This problem emerges due to the demanding high temperatures and pressures, causing instability in catalytic performance. Recent endeavours have focused on innovatively designing catalysts capable of withstanding such conditions. Given the costliness of experimental approaches, a theoretical framework has emerged as a promising avenue for addressing the challenges in methanol production. It has been reported that transition metals, especially Pd, provide ideal binding sites for CO2 molecules and hydrogen atoms, facilitating their interactions and subsequent conversion to methanol. In the geometric single-atom form, their surface enables precise control over the reaction pathways and enhances the selectivity towards methanol. In our study, we employed density functional theory (DFT) to explore the conversion of CO2 to CH3OH on Pd1-Cu(111) and Pd1-Ag(111) single-atom alloy (SAA) catalysts. Our investigation involved mapping out the complex reaction pathways of CO2 hydrogenation to CH3OH using microkinetic reaction modelling and mechanisms. We examined three distinct pathways: the COOH* formation pathway, the HCOO* formation pathway, and the dissociation of CO2* to CO* pathway. This comprehensive analysis encompassed the determination of adsorption energies for all reactants, transition states, and resultant products. Additionally, we investigated the thermodynamic and kinetic profiles of individual reaction steps. Our findings emphasised the essential role of the Pd single atom in enhancing the activation of CO2, highlighting the key mechanism underlying this catalytic process. The favoured route for methanol generation on the Pd1-Ag(111) single-atom alloy (SAA) surface unfolds as follows: CO2* progresses through a series of transformations, transitioning successively into HCOO*, HCOOH*, H2COOH*, CH2O*, and CH2OH*, terminating in the formation of CH3OH*, due to lower activation energies and higher rate constants.