Lyocell is made by dissolving wood pulp in a non-toxic solvent, extruding it through tiny holes to form fibers, and then recovering nearly all the solvent for reuse. The entire process skips the harsh chemicals used in traditional rayon manufacturing, which is why lyocell is considered the most environmentally friendly method for producing wood-based fabric. Here’s how each step works.
It Starts With Trees
Lyocell fibers come from cellulose, the structural compound that makes wood rigid. Manufacturers source wood from tree species rich in cellulose, including eucalyptus, beech, spruce, birch, maple, southern pine, and acacia. Eucalyptus is especially popular because it grows quickly and doesn’t require irrigation or pesticides in most climates.
The wood is harvested, debarked, and chipped into small pieces. Those chips are then processed into sheets of wood pulp, which look a bit like thick cardboard. This pulp is the raw starting material that enters the lyocell factory. Major producers like Lenzing (the company behind the TENCEL brand) source their wood from forests certified under FSC or PEFC standards, meaning the timber comes from responsibly managed or controlled origins.
Dissolving the Pulp
This is the step that sets lyocell apart from every other wood-based fabric. The pulp sheets are broken into smaller pieces, then mixed with a solvent called NMMO (a compound in the morpholine family). NMMO is the only commercially used solvent that can dissolve cellulose directly, and it does so without chemically altering the cellulose itself.
The solvent works by breaking apart the hydrogen bonds that hold cellulose chains together in their rigid structure. Interestingly, it’s not just the interaction between solvent molecules and cellulose that drives the process. Molecular simulations show that the way NMMO molecules interact with each other also plays a critical role in pulling cellulose apart. The result is a thick, honey-like solution sometimes called “dope,” where the cellulose is fully dissolved and ready to be reshaped into fibers.
For comparison, traditional viscose rayon requires soaking pulp in caustic soda (sodium hydroxide), then treating it with carbon disulfide to form an intermediate compound before the cellulose can be regenerated. Carbon disulfide is linked to coronary heart disease, birth defects, skin conditions, and cancer. The viscose process also involves sulfuric acid and zinc compounds. Lyocell needs none of these chemicals.
Spinning the Fibers
Once the cellulose is dissolved, the solution is filtered and pushed through a spinneret, a metal plate with thousands of tiny holes (think of a showerhead). As the solution passes through, it emerges as thin strands. These strands enter what’s called an air gap, a short stretch of open air where the fibers begin to solidify, before dropping into a water bath that washes away the solvent and fully regenerates the cellulose into solid fibers.
This method is called “dry-jet wet spinning.” The air gap is important because it allows the cellulose molecules to align along the length of the fiber, giving lyocell its characteristic strength and smooth texture. The fibers that come out of the bath are continuous filaments that can be cut to any length depending on the end use, whether that’s woven fabric, knit jersey, or nonwoven materials like wipes.
The Closed-Loop Solvent Recovery
After the fibers are washed, the water bath contains diluted NMMO. Instead of being discarded, this mixture goes through an evaporation and purification system that separates the solvent from the water so both can be fed back into the beginning of the process. Manufacturers recover approximately 99.7% to 99.8% of the solvent each cycle.
This closed-loop system is the single biggest reason lyocell’s environmental profile looks so different from viscose rayon. Because almost nothing leaves the loop, chemical pollution and water contamination are essentially non-issues. The main environmental costs of lyocell production come from electricity, steam, and the pulp itself rather than chemical waste. Producing one kilogram of lyocell fiber requires roughly 100 liters of water and generates about 0.3 kilograms of CO2. For context, cotton requires around 10,000 liters of water per kilogram, and polyester generates about 3.1 kilograms of CO2 per kilogram.
Finishing and Fibrillation Control
Raw lyocell fibers have a natural tendency to fibrillate, meaning tiny hair-like microfibers peel off from the surface when the fabric is wet and subjected to friction. This can happen during dyeing, washing, or general wear. In small amounts, fibrillation gives lyocell its signature soft, peach-skin texture that many people love. Too much of it, though, makes fabric look fuzzy and pilled.
Manufacturers manage fibrillation at two points. During fiber spinning, they can chemically modify the cellulose to create more cross-links between chains, making the surface more resistant to peeling. After the fabric is dyed and assembled, a resin finish can be applied that bonds cellulose chains together on the fiber surface. These cross-linking treatments also tend to improve wrinkle resistance, which is why lyocell shirts often hold their shape well after washing. The specific treatment depends on the end product. A lyocell bedsheet might get a different finish than a lyocell denim.
From Fiber to Fabric
After finishing, lyocell fibers are processed like any other textile fiber. They can be spun into yarn on their own or blended with cotton, wool, silk, or polyester to combine properties. Pure lyocell fabric tends to drape fluidly, absorb moisture efficiently, and feel cool against the skin. Blending it with cotton adds structure, while blending with elastane adds stretch.
The fibers can be woven into smooth fabrics like twill and sateen or knitted into jersey for T-shirts and activewear. Lyocell also shows up in nonwoven products like facial wipes and medical dressings, where its absorbency and biodegradability are useful. Because the cellulose is never chemically transformed during production (only dissolved and reshaped), the final fiber remains pure cellulose and will biodegrade in soil or compost under the right conditions.