Injection of CO₂ and subsequent desorption of CH₄ is considered to be the most efficient enhanced coalbed methane (ECBM) recovery technique to date. Meanwhile, CO₂-ECBM is an excellent option for CO₂ geo-sequestration for an extended period. Despite ongoing research efforts and several field applications of this technology, the mechanisms of the process have yet to be fully understood. The coalbed heterogeneity, the fluid interactions with coal, the CO₂ induced swelling, and the continuous pressure and composition changes require outright insights for optimal application of the technique. Furthermore, intermolecular interactions of CO₂ and CH₄, their competitive adsorption on the dry/wet coal surface, and the dispersion and advection processes play an important role in defining the CO₂-ECBM recovery process. An attempt has been made here to understand the key mechanisms of CO₂-ECBM recovery in coalfields, particularly the adsorption of CO₂ in the supercritical state at the recommended sequestration depth.