NMMO monohydrate is used as a solvent in the Lyocell process to produce Tencel fiber. 1  Lyocell is considered an eco friendly biodegradable fabric ‘ composed of cellulose precipitated from an organic solution in which no substitution of the hydroxyl groups takes place and no chemical intermediates are formed (Source).ENCEL® is a brand, the trademark is owned by Lenzing Fibers location Austria. The fibre used for the TENCEL® fabric is called Lyocell. Lenzing Fibers state that the required blend composition must be a minimum of 30% in order to be able to use the brand name.