Electrochemical CO2 reduction reaction (CO2RR) offers a promising approach to close the carbon cycle and reduce reliance on fossil fuels. However, traditional decoupled CO2RR processes involve energy‐intensive CO2 capture, conversion, and product separation, which increases operational costs. Here, we report the development of a bismuth‐poly(ionic liquid) (Bi‐PIL) hybrid catalyst that exhibits exceptional electrocatalytic performance for CO2 conversion to formate. The Bi‐PIL catalyst achieves over 90% Faradaic efficiency for formate over a wide potential range, even at low 15% v/v CO2 concentrations typical of industrial flue gas. The biphenyl in PIL backbone affords hydrophobicity while maintaining high ionic conductivity, effectively mitigating the flooding issues. The PIL layer plays a crucial role as a CO2 concentrator and co‐catalyst that accelerates the CO2RR kinetics. Furthermore, we demonstrate the potential of Bi‐PIL catalysts in a solid‐state electrolyte (SSE) electrolyzer for the continuous and direct production of pure formic acid solutions from flue gas. Techno‐economic analysis suggests that this integrated process can produce formic acid at a significantly reduced cost compared to the traditional decoupled approaches. This work presents a promising strategy to overcome the challenges associated with low‐concentration CO2 utilization and streamline the production of valuable liquid fuels and chemicals from CO2.