Thermal insulation materials play an important role in the challenge of nearly zero-energy buildings thanks to their potential in reducing building's energy demand and carbon emissions. However, increasing the thickness of the insulation material in the building's envelope has implications from the energy, environmental and economic viewpoints. In this context, efforts should be made to optimise insulation thickness to balance all these aspects. This study presents a methodology to analyse optimum insulation material for the building's envelope (roof, facade and floor) and its thickness to achieve energy demand reductions in the operation phase of the building, which is based on the Life Cycle Assessment and Life Cycle Costing methodologies to integrate both environmental and economic aspects, respectively. The system boundary includes the life cycle stages of product and use defined by recent European standards. A selection of eleven alternative insulation materials, both conventional and emerging ones based on natural products, were chosen to conduct the study. After applying the methodology to a single-family house in Spain and performing a sensitivity analysis, the results revealed that sheep wool and recycled cotton, jointly with traditionally used mineral and glass wool, should be promoted in the construction industry as they offer the highest eco-efficient performance among the analysed insulation materials. Reductions of up to 40% in energy demand compared to regulations standards can be achieved in theeco-efficiency context. (C) 2017 Elsevier B.V. All rights reserved.