Introduction to Hookah Coconut Charcoal Hookah coconut charcoal is a popular alternative to traditional charcoal used in hookahs. It is made from the shell of a coconut, which is a renewable resource since coconut trees grow abundantly in tropical regions around the world. The production of hookah coconut charcoal involves burning the coconut shells in a low oxygen environment until they turn into char. The resulting char is then compacted into briquettes that can be used to heat the hookah tobacco.