RuO2-based electrocatalysts are found to be active at low overpotential toward direct electrochemical reduction of CO2 to formic acid and methanol. RuO2 can circumvent the thermodynamic bottleneck resulting from the scaling relations observed on metallic electrocatalyst, by utilizing an alternate pathway through oxygen-coordinated intermediates. Employing density functional theory based computational electrocatalysis models we show adsorbate–adsorbate interaction effects for adsorbates and reaction intermediates on the RuO2(110) surface are large and impactful to the reaction thermodynamics. We studied binding energy amendment due to adsorbate interaction (steric and electronic) with varying coverage of CO* spectators on the catalyst surface. Implications on the reaction pathways help us rationalize differences in experimentally observed carbonaceous product mix and suppression of the hydrogen evolution reaction (HER). We show that a moderate CO* coverage (∼50%) is necessary for obtaining methanol as a product and that higher CO* coverages leads to very low overpotential for formic acid evolution. Our analysis also clarifies the importance of the reaction condition for CO2 reduction to liquid fuels utilizing RuO2-based electrocatalysts.