A prospect in utilizing thermal energy in development of energy systems is by the useof phase change materials (PCMs). PCMs are materials that can store and releaseenergy during phase changes, e.g. from solid to liquid. By-products from the woodand pulping industry could be of interest in this area, in part to add value to theby-products, enhance the yield of the raw product of wood and become less dependenton fossil based fuels. Capsules of lignin and tall oil pitch/tall oil fatty acids weresuccessfully produced with a straightforward coprecipitation method. The solventused was acetone and the antisolvent was distilled water. Dynamic light scatteringanalysis showed average particle diameters of 300 to 500 nm and fairly lowpolydispersity, between 0.2 to 0.3, indicating spherical particles. Scanning electronmicroscopy confirmed particle size and the formation of capsules with shell thicknessless than 100 nm. The particle dispersions showed sufficiently high zeta potential tomaintain a stable colloidal system. Thermal analysis confirmed stability in atemperature range of at least -40 °C to +50 °C, and resistance to decomposition at leastup to around 200 °C. There were also indications of enhanced thermal stability of talloil pitch due to encapsulation. A desired feature for a phase change material is theability to keep a constant temperature during phase change. Regarding using thesynthesized material as phase change material, the results show that the temperaturerange in which phase change, such as melting, occurs is too broad. Latent heat of fusionof 4.7 J/g for the material is also very low compared with commercial phase changematerials. Further studies in modifying the system to impact melting point andenhancement of latent heat is needed if the material should be applicable as an efficientand competitive phase change material.