The environmental performance of district heating (DH) pipes insulated with polyethylene terephthalate (PET) foams and pipes insulated with polyurethane (PUR) foam was discussed. It was found that carbon dioxide blown PET foam insulated DH pipes have the potential to compete successfully in terms of environmental performance with cyclopentane blown PUR foam insulated pipes provided that commercial methods to produce PET foam of lower density are developed. It was also found that the utilization of recycled PET can reduce the environmental impacts and would contribute to the efficient use of resources in society. The potential for improvement in the long-term thermal and environmental performance of PET is high.