Carbon dioxide (CO₂) sequestration in coal seams represents one (of only two) geological sequestration option that has the potential to yield a value-adding byproduct (enhanced coalbed methane [ECBM] recovery) to mitigate sequestration costs (the other being enhanced oil recovery [EOR]). Although the global pervasiveness of coal seams and their substantial adsorption capacity for CO₂ would suggest they represent a significant sequestration opportunity, the infancy of the technology as well as concerns over future coal minability has tempered sequestration capacity estimates. These two issues, an incomplete understanding of the interactions between CO₂ and coal (and the implications that derive therefrom, such as knowing what are the most appropriate geological environments for sequestration, what are the best well development strategies, how should wells be operated, etc.) and the potential future minability of coal (i.e., what exactly is a deep, unminable coal that will not be developed at some future date), represent the major obstacles to widespread acceptance of coal seams as a viable carbon sequestration option.

The largest CO₂-ECBM field test was performed by Burlington Resources (now ConocoPhillips) at the Allison unit in the San Juan Basin from 1995 to 2001. In this pilot test, approximately 336,000 t of CO₂ was injected into four wells completed in the Fruitland coal. Improvement in ECBM recovery was predicted, and the ability of the coal to adsorb and retain CO₂ was demonstrated. Smaller two-well and single-well tests have also been performed in Poland, Japan, Canada, and China. These are primarily government-funded demonstration projects with the primary objective of testing carbon sequestration technology. Additional field tests with similar objectives are also currently (as of this writing) in the planning stages as part of the U.S. Department of Energy's (DOE) Regional Carbon Sequestration Partnership program.

Economic analysis suggests that the CO₂-ECBM process can be profitable in some cases. Besides the obvious importance of infrastructure costs and energy prices to economic performance, a key technical factor is the ability to maintain high CO₂ injection rates into the coal seams, which is a challenge because CO₂ tends to swell coal, thus reducing permeability and injectivity. Overcoming this challenge, via the identification of the most favorable reservoir environments, the best project development strategies, appropriate operating practices, etc., represents a critical milestone toward the widespread acceptance of the technology.