Colloidal lignin particles (CLPs) are potentially one of the sustainable alternatives for petroleum-based feedstock. CLPs address the heterogeneity of lignin by enhancing its homogeneous dispersion in aqueous phases. The main production steps are dissolving lignin in tetrahydrofuran, diluting the solution with ethanol, forming CLPs through self-assembly after encountering water, recovering solvents, and finally drying CLPs. In this process, solvent recovery plays an important role in mitigating environmental problems. However, the formation of azeotropes makes the separation process energy-intensive and costly. In this work, two separation methods, evaporation and distillation, are modelled in Aspen Plus ® and compared based on their total annual costs (TACs). Sizing and cost estimations are conducted based on vendor quotations and using design and economic analyzer tools. Resultsshow that distillation reduces costs by up to 37% compared to evaporation. Accordingly, as the main separation unit, distillation parameters are optimized based on the minimum TAC.