The steady increase in CO2 levels in the atmosphere is the leading cause of climate change and global warming and is now a global concern. To reduce the impact of CO2, various novel routes have been proposed to capture, utilize, and convert it into valuable chemicals. In this study, a noble Ce-doped Mg–Al layered double hydroxide (Mg–Al LDH) [Mg/Al molar ratio = 3 and Ce/Al molar ratio = 0.1, 0.5, 1.0] were synthesized using co-precipitation and sol–gel method and used as an adsorbent for CO2 gas and later on efficient source of CO2 in the synthesis of ethylene urea (EU). The specific surface area of the Ce-doped Mg–Al LDHs prepared by sol-gel method (96.1–333 m2/g) were higher than co-precipitation method (0.5–10.6 m2/g). Each Ce-doped Mg–Al LDHs were successfully adsorbed CO2, where first desorption occurred at around 50–250 °C temperature. The comparative adsorption of CO2 was observed increase with decreasing the Ce/Al molar ratio. Adsorption of CO2 was found to be 0.05, 0.04, 0.04 mmol/g for co-precipitation method and 0.62, 0.42, 0.37 mmol/g for sol-gel method, where Ce/Al molar ratio was 0.1, 0.5, 1.0 respectively. The EU produced from the reaction between ethylenediamine (EDA) and CO2 adsorbed Ce-doped Mg–Al LDHs, where a comparative amount of EU was observed in the order of Ce/Al molar ratio = 1.0 > 0.5 > 0.1. According to the temperature effect, EU production was increased with an increase in temperature from 120 °C to 160 °C. At 160 °C, the production of EU by co-precipitation method was found to be 0.03, 0.04, 0.07 mmol/g and by sol-gel method was found to be 0.06, 0.07, 0.16 mmol/g, where Ce/Al molar ratio was 0.1, 0.5, 1.0 respectively. A much higher production was found in all the Ce-doped Mg–Al LDHs compared to pristine Mg–Al LDH at all the temperatures. The performance of Ce-doped Mg–Al LDHs synthesized by the sol-gel method was observed to be better than that of the co-precipitation method in terms of both adsorption of CO2 and production of EU. In this study, Ce-doped Mg–Al LDH introduced as a successful CO2 adsorbent, a source of CO2 and an effective promoter in the ethylene urea production.