A laboratory based investigation has been conducted on permeability damage and CO2 storage or retention in the lignite core during alternative injection of brine and supercritical carbon dioxide. Moreover, anthracite and bituminous coal beds were focused by the scientific community for effective production and reservoir formation damage study. But, now-a-days, lignite based coal bed methane reservoirs have attracted attention for productive exploitation and formation collapse investigation. Hence, for this purpose, a single component injection two phase (Brine + Supercritical CO2) coreflood test analysis under alternative injections were performed to investigate the occurrence of lignite structural collapse, permeability damage, injectivity decline and CO2 retention as well. The experimental study reveals that, due to gravity segregation there is a high rate of fluid saturation in lignite core and also, moderate level of heat transfer coefficient was also noted. Also, lignite core structural collapse under the brine and supercritical CO2 injection at different velocities resulted in huge volume of coal and kaolinite fines concentration. Kaolinite and coal fines migration resulted in pressure change and permeability decline in lignite core. The suspensions produced were passed to microstructural analysis and it revealed that kaolinite fine particle tends to possess a leaflet geometrical structure, which obstructed the cleats and restricted the fluid flow. Subsequently, hysteresis modelling (Pranesh 2018) was applied to this problem to quantify the amount of CO2 retention in lignite core. Additionally, statistical model, multiple linear regression was applied to this problem to validate the experimental model, which showed good agreement.