Dual-function materials (DFMs) combine sorbent and catalytic components to perform selective CO2 capture and subsequent hydrogenation. This study explores the performance of rare-earth oxides (REOs) as CO2 adsorption sites on Ru/Al₂O₃. REOs increase CO₂ uptake by upwards of +60 % by enhancing the overall catalyst surface basicity and favoring metal–support interactions. Thermogravimetric analysis during CO₂ adsorption-hydrogenation cycles exhibited significant catalytic activity and enhanced stability of Ru-REO/Al₂O₃ at temperatures as low as 200 °C. This leads to methane production of 50–85 µmol g$^{−1}$, surpassing recently reported values obtained for alkali and alkali-earth promoted Ru-based materials operated at 250 °C. The highest performing studied DFM, RuNd₂O₃/Al₂O₃, achieved 85 % CO₂ capture efficiency and steadily produced methane in cyclic operation (+120 % CO₂ uptake relative to Ru/Al₂O₂). Operando DRIFTS revealed that the dominant mechanism for methane formation is the hydrogenation of ruthenium carbonyls, which are stabilized by REOs. Upon CO₂ exposure, surface carbonates and bicarbonate species form more abundantly on DFMs than on Ru/Al₂O₃. This confirms that REOs enhance the adsorption and retention of carbonates, which generate additional promoter-related reaction pathways during low-temperature hydrogenation. These findings are crucial in the advancement of sustainable, wider operation range carbon capture and utilization technologies.