Sustainably produced renewable biomass has the potential to replace fossil-based feedstocks, for generation of biobased fuels and chemicals of industrial interest, in biorefineries. In this context, seaweeds contain a large fraction of carbohydrates that are a promising source for enzymatic and/or microbial biorefinery conversions. The thermoanaerobe Thermoanaerobacterium AK17 is a versatile fermentative bacterium producing ethanol, acetate and lactate from various sugars. In this study, strain AK17 was engineered for more efficient production of ethanol by knocking out the lactate and acetate side-product pathways. This was successfully achieved, but the strain reverted to acetate production by recruiting enzymes from the butyrate pathway. Subsequently this pathway was knocked out and the resultant strain AK17 M6 could produce ethanol close to the maximum theoretical yield (90%), leading to a 1.5-fold increase in production compared to the wild-type strain. Strain AK17 was also shown