Due to industrialization and urbanization, as humans continue to rely on fossil fuels, carbon dioxide (CO2) will inevitably be generated and result in an increase of Global Warming Gases (GWGs). However, their prospect is misted up because of the environmental and economic intimidation posed by probable climate shift, generally called it as the "green house effect". Among all GWGs, the major contributor in greenhouse effect is CO2. Mitigation strategies that include capture and storage of CO2 by biological means may reduce the impact of CO2 emissions on environment. The biological CO2 sequestration has significant advantage, since increasing atmospheric CO2 level supports productivity and overall storage capacity of the natural system. This paper reviews CO2 sequestration mechanism in bacteria and their pathways for production of value added products such as, biodiesel, bioplastics, extracellular polymeric substance (EPS), biosurfactants and other related biomaterials.