We present a study in which the suitability of potassium promoted iron-based Fischer–Tropsch (FT) catalysts for the generation of synthetic natural gas additives via the hydrogenation of carbon dioxide through a combined reverse water gas shift (WGS) and FT reaction is studied. Using novel in situ instrumentation based on XRD and magnetometry techniques the reversible conversion of metallic iron to Hägg carbide under reaction conditions and its decomposition in hydrogen could be monitored. The facilitating effect of potassium in the formation of iron carbide could be exposed as function of time on stream. While the FT reaction was reduced in the presence of high potassium loadings the reverse WGS reaction seemed to be unperturbed. A faster activation of an iron phase obtained via the decomposition of iron carbide, compared to the initial activation of a pristine iron phase obtained via the reduction of iron oxide was witnessed.