A business venture to roast coffee using clean hydrogen is underway in Laos, where abundant water resource can generate hydroelectricity at low costs. 

TSB Greenex, the Tokyo-based environmental concern, has joined eight other firms to launch the Green Hydrogen Valley Project in Laos.

A coffee roasting plant in Champasak province is set to begin operations by mid-2026. The 6 billion-yen ($41 million) project received partial assistance from Japan’s Ministry of Economy, Trade and Industry.

The plant will use hydrogen as fuel for roasting locally grown Arabica coffee beans at 200 degrees Celsius. The roasted coffee will be sold in Laos and abroad.

The facility is set to have a production capacity of 3,000 tonnes a year, on par with Laos’ largest coffee maker.

Hydrogen is called green if it is separated from water using carbon-free electricity. The cost of producing green hydrogen is estimated to be roughly 20% to 30% pricier than making hydrogen with fossil fuels.

TSB will get around the cost limitations by tapping Laos’ wealth of hydropower. Over 70% of Laos is located in mountainous highlands, meaning much of the country is well suited for hydroelectric plants.

Hydroelectricity accounts for 80% of Laos’ mix of power sources. Electric fees are 20% of what is charged in Japan, and around 30% of fees in Thailand.

Thanks to Laos’ cheap hydropower, the price of TSB’s hydrogen-roasted coffee is expected to cost 10% to 20% less than regular coffee.

The coffee will “appeal to consumers who prioritize price over the environment,” said Ryutaro Nishio, TSB’s head of international sales.

The coffee was served at the Association of Southeast Asian Nations economic minister meeting in the Laotian capital of Vientiane in late September. 

Making coffee with green hydrogen has been considered a prohibitive business venture from a cost perspective. TSB’s coffee plant would be the first of its kind in the world, according to Nishio.

Laos is a small economy, with a population of 7.6 million people, and has lagged behind its neighbors in developing its industry.

The majority of Laos’ exports consist of primary commodities such as farm products and iron ore. A key to the country’s development is creating value-added products.

Laos is also known as one of the world’s leading producers of coffee beans. The combination of renewable energy with the staple could unlock a unique advantage for the country.