A geothermal-assisted CO2 replacement method (GACR) was proposed, in which ambient-temperature CO2 is injected from the well head of a heat exchange well to the wellbore in geothermal reservoir for heating, and the heated CO2 then flows upward into the hydrate bearing layer (HBL) to accelerate the natural gas hydrate (NGH) dissociation. The GACR method, which is low-carbon and environment friendly, requires no surface heating, recovers NGHs by means of combined thermal stimulation and CO2 replacement, and meanwhile achieves CO2 storage. Then a numerical simulation model was developed to investigate the heat exchange performance of the heat exchange well, the development performance of HBL, the CO2 storage performance and factors affecting such a development process. Calculations indicate that the temperature of the returned CO2 heated by the geothermal reservoir at the entry of HBL can be up to 68.9 degrees C, far beyond the temperature of HBL. Hence, GACR can fulfill the NGH recovery combining thermal stimulation and CO2 replacement. Compared with the depressurization method and the case with no geothermal reservoir, the cumulative CH4 production after 20 years of development can increase by 305% and 51.9% respectively, with a CO2 storage volume of 2.11 x 10(7) m(3) and a storage factor of 14.5%. (C) 2017 Elsevier Ltd. All rights reserved.