AbstractCarbon dioxide (CO2) geological sequestration technology is an attractive means of reducing greenhouse gas emissions. This work aims to seek the transport mechanism of CO2 in fractured porous media. A two‐phase flow extended finite element model is developed in this paper. The two‐phase flow in the fracture and porous matrix are all considered in the model development. We present numerical simulations under 2D linear flow conditions with specific and sensitivity analysis about fracture properties, capillary pressure, relative permeability, reservoir heterogeneity, and properties. It is found that fracture will dominate the CO2 transport when the intersection angle of fracture orientation and injection direction is less than 90°, and CO2 flows into deeper regions along the fracture. It is significant to find a suitable capillary pressure and relative permeability model which matches the microscopic pore structure when simulating CO2 geological sequestration in fractured media. Using the Brooks–Corey equation for capillary pressure and relative permeability, the CO2 transport efficiency would increase by around 16% compared to the Van Gneuchten equation. Besides, the CO2 phase and properties evolution during CO2 geological sequestration has a great influence on CO2 transport efficiency., CO2 transport efficiency is reduced by around 18% due to an increase in CO2 density and viscosity when considering CO2 properties evolution. © 2022 Society of Chemical Industry and John Wiley & Sons, Ltd.