Woody logging residues produced by logging activities are currently an underutilised resource that is mainly burned for energy production or left in the forest to decay, thus releasing CO2 into the atmosphere. This resource could be used to manufacture long-lasting products and store a significant amount of CO2, promoting CO2 valorisation in rural areas. In this study, potential use for logging residues is proposed – the production of low-density wood fibreboard insulation panels. The new material's potential properties, manufacturing method and combined heat and power (CHP) plant parameters were proposed. The potential climate benefits of the new product were analysed using various biogenic carbon accounting methods. As energy production for manufacturing can be a significant source of emissions, possible energy production scenarios were analysed for manufacturing the product. However, an economically and environmentally viable energy production scenario should be chosen. By conducting a multi-criteria analysis, three possible energy production scenarios were analysed – wood biomass CHP plant, a natural gas CHP plant and a standalone wood biomass combustion plant combined with Solar photo-voltaic (PV) panels. The scenarios were analysed in terms of technological, economic, and environmental performance to determine the best strategy in this case.