The carbon dioxide electroreduction reaction (CO2RR) provides ways to produce ethanol but its Faradaic efficiency could be further improved, especially in CO2RR studies reported at a total current density exceeding 10 mA cm−2. Here we report a class of catalysts that achieve an ethanol Faradaic efficiency of (52 ± 1)% and an ethanol cathodic energy efficiency of 31%. We exploit the fact that suppression of the deoxygenation of the intermediate HOCCH* to ethylene promotes ethanol production, and hence that confinement using capping layers having strong electron-donating ability on active catalysts promotes C–C coupling and increases the reaction energy of HOCCH* deoxygenation. Thus, we have developed an electrocatalyst with confined reaction volume by coating Cu catalysts with nitrogen-doped carbon. Spectroscopy suggests that the strong electron-donating ability and confinement of the nitrogen-doped carbon layers leads to the observed pronounced selectivity towards ethanol. The electroreduction of CO2 to ethanol could enable the clean production of fuels using renewable power. This study shows how confinement effects from nitrogen-doped carbon layers on copper catalysts enable selective ethanol production from CO2 with a Faradaic efficiency of up to 52%.