Elevated CO₂ levels in gas accumulations within the onshore area of the Taranaki Basin can be quantitatively accounted for by decarboxylation of vitrinite-rich Tertiary coals over the lignite to early high-volatile bituminous coal-rank range. The highest levels are found within sandstone reservoirs vertically adjacent to Eocene coal seams that have realized approximately 50% of their CO₂ generative potential. The gas exists as a supercritical fluid under reservoir conditions and appears to be generated in significant amounts, comparable to liquid hydrocarbons. CO₂ may aid oil expulsion from coals directly when intense CO₂ generation coincides with major oil generation, or indirectly by creating pressure-induced microfractures du ing the relatively rapid generation of large amounts of CO₂ prior to the main phase of oil generation. For these effects to be realized, the rate of CO₂ production relative to removal is considered critical, and favorable conditions are probably restricted to basins that have experienced relatively rapid heating. In this respect, the Taranaki Basin provides a model for CO₂ evolution in many southeast Asian Tertiary basins.