Hydrogen-rich syngas, produced by underground coal gasification (UCG) process, is a valuable feedstock for chemical industry. However, it can contain large quantities of carbon dioxide (CO2), which requires separation and sequestration to reduce the carbon footprint of the process. This study explores mechanisms influencing coal permeability when CO2 is injected back into the coal through existing gasification chambers. Two main mechanisms affecting permeability are thermal effects associated with underground coal gasification and CO2-related coal matrix swelling.The effects of thermal processes and CO2 flooding on the fracture network of the coal are investigated through a series of comprehensive experiments. Thermal treatment of the studied sample at a temperature of 210 °C shows a notable effect on fracture morphology, increasing width and permeability by up to a factor of 2 and 5, respectively. CO2 flooding, on the other hand, impairs fracture network due to chemisorption driven processes, leading to irreversible changes. Following CO2 flooding experiment, fracture porosity decreases by a factor of three and subsequently permeability declines by 70–80 % within the studied effective stresses range. Our characterization study indicates that thermal treatment significantly increases permeability, compensating for impairments to the fracture network associated with CO2 injection.