The company is working to cut waste being sent to landfill by 2020
Compostable cups are being introduced across the Insomnia network of coffee shops from today.
It comes as part of the company's efforts to reduce the amount of waste being sent to landfill by 15 million takeaway coffee cups and 20 million single use items by 2020.
The coffee cup lids are recyclable, so customers are being encouraged to separate the cup and lid when disposing of them.
Other measures being taken by the chain include replacing plastic straws with paper ones, and the installation of compostable bins in shops.
Harry O’Kelly, CEO of Insomnia, observed: "Today we are introducing a compostable cup, and that will roll out in the estate over the next two to three weeks, in all sizes.
"We now [have] paper straws, and the next then will be our cutlery.
" is a very aggressive timeline... it ain't 2025, it ain't 2022 - it's just over a year-and-a-half away."
Environmentalist Duncan Stewart says reusable cups are still best, but compostable ones are a lot better than non-recyclable.
He observed: "The fact that you can actually return to the Insomnia shop, with your cup... that's really important.
"When you go home, bring [the cup] home - [don't] put it into the typical bins that are not sorted around the city."
He also stressed that the new cups should go into brown compost bins rather than green recycling bins or the standard black bins.
Reporting by Juliette Gash and Stephen McNeice