Form of carbon Greek character found in fireplace (8)
I believe the answer is:
graphite
'form of carbon' is the definition.
(I've seen this before)
'greek character found in fireplace' is the wordplay.
'greek character' becomes 'phi' (letter from the Greek alphabet).
'found in' is an insertion indicator.
'fireplace' becomes 'grate' (I've seen this before).
'phi' inserted into 'grate' is 'GRAPHITE'.
(Other definitions for graphite that I've seen before include "Form of carbon used in pencils" , "Black carbon used in lead pencils" , "black stuff" , "Mixed with clay it forms the 'lead' in pencils" , "Pencil-lead carbon" .)