Geomechanical stability issues may arise due to induced thermal stresses because CO2 will generally reach the storage formation at a temperature lower than that of the reservoir. Cold injection will form a cold region around the injection well, which will induce thermal stress reduction. We simulate cold CO2 injection in deep saline formations in a normal faulting stress regime and investigate under what conditions thermal stresses may jeopardize the caprock sealing capacity by studying the effect of the heterogeneity of the thermal expansion coefficient between the reservoir and caprock. Furthermore, we use an elastoplastic constitutive model to account for inelastic deformation related to fracture instability. We find that the temperature difference should be limited in the presence of very stiff reservoirs, because the thermal stress reduction is proportional to the product of the rock stiffness, the temperature difference and the thermal expansion coefficient. Simulation results show that inelastic strain occurs in the cooled region within the reservoir, but fracture instability does not propagate into the caprock in the considered normal faulting stress regime. However, the cooled region of the lower portion of the caprock may experience yielding if the thermal expansion coefficient of the caprock is larger than that of the reservoir, because the thermal stress reduction in the caprock becomes larger than in the reservoir, which increases the deviatoric stress. Nevertheless, irreversible strain caused by cooling within the caprock are limited to a small region of the lower portion of the caprock and thus, the overall sealing capacity of the caprock is not compromised, so CO2 leakage is unlikely to occur because of cooling. (C) The Authors. Published by Elsevier Ltd.