Abstract Li‐CO 2 batteries (LCOBs) are considered to be an important strategy toward efficient carbon sequestration and energy storage. However, most typical discharge products (Li 2 CO 3 and C) are insoluble and chemically stable, and require a high charge overpotential (≈3.5–4.5 V) to be decomposed. Herein, a novel aqueous LCOB with formic acid (HCOOH) as the discharge product is proposed. The soluble HCOOH can be directly utilized in the charge process without any further purification or compression, realizing a very facile electrochemical cycle. Nanoporous Pd films with a high electrochemical surface area exhibit a high bifunctional performance toward both CO 2 reduction and formic acid oxidation. Accordingly, the assembled LCOB achieves a high working potential plateau of 2.61 V whereas the charge potential is significantly lowered to 2.87 V, delivering the highest energy efficiency of 91%. The present work demonstrates a brand‐new aqueous LCOB with HCOOH as the discharge product for utilizing CO 2 as power source.