The concern over fire is ridiculous. Has anyone attempted to start a pile of sawdust on fire?
At best one can get it to smolder, but for only a brief period of time.
I have had my shop insulated with sawdust produced during many wood projects. The composition of the material is derived from anything from planer chips to finish sanding dust. I have had a steel smoke pipe from a woodburner vented through chimney liner for years. I have measured the liner temperature where it directly contacts the sawdust and the maximum temperature reached during an entire winter's burning was 92 degrees Fahrenheit. This temperature was reached only once when the chimney creosote caught fire.
Think that the insulation is quite safe--effective and inexpensive.