© 2015 The Authors. In Microbial Fuel Cells (MFCs), the recovery of water can be achieved with the help of both active (electro-osmosis), and passive (osmosis) transport pathways of electrolyte through the semi-permeable selective separator. The electrical current-dependent transport, results in cations and electro-osmotically dragged water molecules reaching the cathode. The present study reports on the production of catholyte on the surface of the cathode, which was achieved as a direct result of electricity generation using MFCs fed with wastewater, and employing Pt-free carbon based cathode electrodes. The highest pH levels (>13) of produced liquid were achieved by the MFCs with the activated carbon cathodes producing the highest power (309 μW). Caustic catholyte formation is presented in the context of beneficial cathode flooding and transport mechanisms, in an attempt to understand the effects of active and passive diffusion. Active transport was dominant under closed circuit conditions and showed a linear correlation with power performance, whereas osmotic (passive) transport was governing the passive flux of liquid in open circuit conditions. Caustic catholyte was mineralised to a mixture of carbonate and bicarbonate salts (trona) thus demonstrating an active carbon capture mechanism as a result of the MFC energy-generating performance. Carbon capture would be valuable for establishing a carbon negative economy and environmental sustainability of the wastewater treatment process.