Recent emphasis on carbon dioxide utilization has necessitated the exploration of different catalyst compositions other than copper-based systems that can significantly improve the activity and selectivity towards specific CO2 reduction products at low applied potential. In this study, a binary CoTe has been reported as an efficient electrocatalyst for CO2 reduction in aqueous medium under ambient conditions at neutral pH. CoTe showed high Faradaic efficiency and selectivity of 86.83 and 75%, respectively, for acetic acid at very low potential of − 0.25 V vs RHE. More intriguingly, C1 products like formic acid was formed preferentially at slightly higher applied potential achieving high formation rate of 547.24 μmol cm−2 h−1 at − 1.1 V vs RHE. CoTe showed better CO2RR activity when compared with Co3O4, which can be attributed to the enhanced electrochemical activity of the catalytically active transition metal center as well as improved intermediate adsorption on the catalyst surface. While reduced anion electronegativity and improved lattice covalency in tellurides enhance the electrochemical activity of Co, high d-electron density improves the intermediate CO adsorption on the catalyst site leading to CO2 reduction at lower applied potential and high selectivity for C2 products. CoTe also shows stable CO2RR catalytic activity for 50 h and low Tafel slope (50.3 mV dec–1) indicating faster reaction kinetics and robust functionality. Selective formation of value-added C2 products with low energy expense can make these catalysts potentially viable for integration with other CO2 capture technologies thereby, helping to close the carbon loop.