Transforming hazardous and difficult-to-process waste materials, like spent Ni-MH batteries and aluminium foil, into nanocatalysts (NCts) provides a sustainable solution for resource management and reducing environmental impact. This study demonstrates a novel approach by extracting nickel sulfate (NiSO4·xH2O) from battery waste and subsequently converting it into Ni(OH)2 hydrogel precursors using l-glutamic acid. Waste aluminium foil was processed into alumina (Al2O3), and combined with Ni(OH)2 to synthesize Ni/η-Al2O3 NCts with 4% and 8% Ni loading. Characterization through XRD/SAED, STEM/EFTEM, and EELS revealed a disordered cubic structure of η-Al2O3, with well-dispersed Ni particles, making it effective for CO2 hydrogenation. The 8-Ni/η-Al2O3 exhibited the best catalytic performance, with CH4 selectivity of 99.8% and space time yield (STY) of 80.3 mmolCH4 gcat -1 h-1 at 400 °C. The CO2 methanation mechanism over Ni/η-Al2O3 NCts was further explored using operando DRIFTS aligned with GC + MS. The operando investigation suggested a preferential associative CO2 methanation pathway, involving sequential adsorption and hydrogenation of CO2 to hydrogen carbonates on Ni/η-Al2O3, and their transformation into formate and methoxy intermediates leading to methane. Finally, to complete the upcycling/recycling loop, the spent Ni/η-Al2O3 NCts were recycled into Ni and Al precursors. These findings underscore the potential of upcycling waste materials for synthesizing sustainable, high-performance NCts, and offer insights into the CO2 methanation mechanism.