Herein we investigate the stabilization behavior of a cellulose-lignin composite fibre towards application as a new bio derived precursor for carbon fibres. Carbon fibre materials are in high demand as we move towards a lower emission high-efficiency society. However, the most prominent current carbon fibre precursor is an expensive fossil-based polymer. Over the past decade significant research has focused on using renewable and bio derived alternatives. By blending cellulose and lignin and spinning a fibre with a continuous bi-component matrix a new approach to overcome the current limitations of both these precursors is proposed. A thorough study is conducted here on understanding the stabilization of the new precursors which is a critical step in the carbon fibre process. We show that stabilization times of the composite fibre are significantly reduced in comparison to pure lignin and improvements in mass yield compared to pure cellulose fibres are observed.