Various reducing and inert gases have been used in the catalytic chemical vapour deposition (CCVD) synthesis of carbon nanomaterials (CNMs). In this paper we report on the effects that hydrogen and nitrogen gases have on the production of CNMs from acetylene on fly ash catalysts. Parameters such as temperature and gas environments were investigated. Transmission electron microscopy (TEM) revealed that CNMs of various morphologies such as carbon nanofibers (CNFs) and carbon nanospheres (CNSs) were formed. When hydrogen was used the carbonaceous products were formed in higher yields as compared to when nitrogen was used. This could be due to the multifunctional roles that hydrogen plays as compared to nitrogen. Laser Raman and Mössbauer spectroscopy measurements revealed that three types of products were formed, namely: amorphous carbon, graphitic carbon and iron carbide. Significantly cementite (Fe3C) was identified as the main intermediate carbide species in the catalytic growth of well-ordered CNMs.