In current study various aspects of catalyst development for the Sabatier type methanation reaction were investigated. It was demonstrated that starting from 330–380 °C Mg 2 NiH 4 hydride heating under CO 2 and H 2 gas flow initiates hydride decomposition, disproportionation and oxidation. These reactions empower catalytic properties of the material and promotes CO 2 methanation reaction. Detailed structural, colorimetric and thermogravimetric analysis revealed that in order to have fast and full-scale development of the catalyst (formation of MgO decorated by nanocrystalline Ni) initial hydride has to be heated above 500 °C. Another considerable finding of the study was confirmation that potentially both high grade and low grade starting Mg 2 Ni alloy can be equally suitable for the hydride synthesis and its usage for the promotion of methanation reactions.