Boron-based chemicals are added to the cellulose as a fire retardant. These chemicals also work as fungicides in protecting against mold, mildew, and other microbes. Manufacturers will list the specific product as having a class 1 rating for flame spread and smoke development when tested in accordance with ASTM E84.5
Cellulose insulation made from postconsumer paper is not a fire hazard. All cellulose insulation, including that made from postconsumer materials, must meet the flammability standards set by the CPSC. Because of its density, cellulose insulation keeps oxygen (the fuel of fire) away from structural building components, making them fire resistant.
In fire testing done at the National Research Council of Canada (NRCC), wet-spray cellulose, although not combustible, may have contributed to poor fire resistance as compared with dry-blown cellulose or rock wool batts. Since wet-spray insulation adheres to the wall sheathing, when the sheathing is exposed to the fire and collapses, it pulls the insulation out of the cavity, exposing the entire cavity to the fire. A cavity without any fireblocking or fireproof insulation functions like a chimney, but this may only be a problem with party (fire) walls that separate habitable dwellings.2