The sensitivity of coal permeability to the effective stress means that changes in stress as well as pore pressure within a coal seam lead to changes in permeability. In addition coal swells with gas adsorption and shrinks with desorption; these sorption strains impact on the coal stress state and thus the permeability. Therefore the consideration of gas migration in coal requires an appreciation of the coupled geomechanical behaviour. A number of approaches to representing coal permeability incorporate the geomechanical response and have found widespread use in reservoir simulation. However these approaches are based on two simplifying assumptions: uniaxial strain (i.e. zero strain in the horizontal plane) and constant vertical stress. This paper investigates the accuracy of these assumptions for reservoir simulation of enhanced coalbed methane through CO2 sequestration. A coupled simulation approach is used where the coalbed methane simulator SIMED II is coupled with the geomechanical model FLAC3D. This model is applied to three simulation case studies assembled from information presented in the literature. Two of these are for 100% CO2 injection, while the final example is where a flue gas (12.5% CO2 and 87.5% N-2 is injected. It was found that the horizontal contrast in sorption strain within the coal seam caused by spatial differences in the total gas content leads to vertical stress variation. Thus the permeability calculated from the coupled simulation and that using an existing coal permeability model, the Shi-Durucan model, are significantly different; for the region in the vicinity of the production well the coupled permeability is greater than the Shi-Durucan model. In the vicinity of the injection well the permeability is less than that calculated using the Shi-Durucan model. This response is a function of the magnitude of the strain contrast within the seam and dissipates as these contrasts diminish. Crown Copyright (C) 2008 Published by Elsevier B.V. All rights reserved.