Excessive emission of greenhouse gases, such as CO2, from industries and the resulting global warming, has forced mankind to investigate the conversion of CO2 into commercially valuable chemicals and achieve a sustainable carbon cycle. Therefore, various approaches have been used to uptake, harness, and transform CO2 into valuable chemical compounds. In this study, novel Zr-containing Mg-Al layered double hydroxides (LDHs) with two distinct compositions, namely, Mg2AlZr LDH and MgAlZr2 LDH, were created using sol–gel technique. These compounds served as the adsorbent for CO2 and an effective CO2 source during ethylene urea (EU) production. The Mg2AlZr and MgAlZr2 LDHs exhibited specific surface areas of 171 and 197 m2/g, respectively. Increasing the Zr content played a crucial role in enhancing the generation and dissemination of zirconium hydroxide in the Mg-Al LDHs, thus resulting in an augmented surface area. The synthesized Zr-containing Mg-Al LDHs demonstrated effective CO2 adsorption capabilities. The comparative CO2 adsorption increased from 0.62 to 0.98 mmol/g with increasing molar content of Zr. The desorption of CO2 occurred in the 50–250 °C temperature range from pores and surfaces. EU was successfully produced by reacting the CO2-adsorbed Zr-containing Mg-Al LDHs with ethylene diamine (EDA). The yield using MgAlZr2 LDH (0.06 mmol) was higher than that using Mg2AlZr LDH (0.02 mmol) at 160 °C. Consequently, the synthesized Zr-containing Mg-Al LDHs exhibit promising applications as efficient CO2 gas adsorbents, CO2 sources for further reactions, and effective accelerators to produce valuable EU.