What Exactly Is Lyocell Fabric, and Is It Really Eco-Friendly?

I sleep on a lot of bedding. I've slept on everything from bamboo and silk to plain-weave cotton, but there's a term I've seen quite often in bedding materials that I didn't know much about: lyocell. Lyocell is a cellulose-based, man-made fiber similar to fabrics like rayon with purported eco-friendly benefits in the manner it's manufactured. Making rayon uses different, harsher chemicals that can't be reused, while lyocell is known for its closed-loop production processes that reuse almost all of the solvent to make more lyocell. It's owned by the Lenzing Group, which makes a specific trademarked Tencel Lyocell fabric.