Cellulose insulation is generally made from recycled newspaper. Cellulose has the disadvantage of requiring to be treated with boric acid, sodium borate or ammonium sulfate to counter its high flammability. Tests have shown that these chemical treatments can cause metal fasteners, plumbing parts and electrical wires to corrode if left in contact with wet, treated cellulose insulation for extended periods.
There have been instances when cellulose has indirectly caused a fire. This usually happens when insulation is installed in direct contact with an older style recessed lighting fixture. The insulation traps the heat created by the light bulb, causing the lighting fixture to overheat. Since wool is naturally fire retardant, it does not burn but instead singes away from fire and extinguishes itself.
Settling of cellulose blown insulation can affect its long term R-value. Most blown-in insulations eventually settle or compact therefore causing a reduction in its thermal values. On the other hand, Wool Lambsulation does not settle and is guaranteed to retain its structure and thermal ratings for 50 years!