This SBIR Phase II project will develop a method to convert the byproduct glycerol to a value-added co-product, xylitol, thereby helping to reduce the costs associated with biodiesel production. The anticipated result is a scalable process capable of converting crude glycerol to xylitol in a single step bioreactor process and a demonstrated method for recovery of the value-added product.<br/><br/>The broader impact/commercial potential of the project will be to further biodiesel as a replacement for petrochemical diesel. Converting the main by-product of biodiesel production, glycerol, to a value-added product would improve the economics of biodiesel, while removing a waste stream and providing a reduction in price of the co-product. Xylitol itself also has beneficial societal impacts including anti-carcinogenic effects as a safe sweetener for diabetics, and it does not promote new cases of diabetes as some sweeteners are suspected of doing.