Abstract: A compostable container and a method of using the compostable container are disclosed. The container comprises a paper layer having oxygen barrier properties. The paper layer may be sized with the oxygen barrier chemical. The container may further comprise an oxygen barrier layer comprising a compostable polymeric material. The compostable container may be used in a method of producing a beverage with a beverage dispensing machine comprising a container receiver arranged to receive a container. In the method, one uses a compostable container of the invention comprising at least one component made from a coated paper with oxygen barrier properties.