The study assesses the energy and CO2 reduction potential of innovative bio-based insulation materials for zero-energy renovations of residential building stocks across the European Member States. The analysis uses an energy modeling tool aligned with the ISO 52016 standard to evaluate key performance indicators (KPIs) related to final energy consumption, CO2 emissions, net energy use reduction, and payback time. The study focuses on critical R-values, defined as the insulation levels where additional insulation reduces energy consumption and CO2 emissions by less than 3%. For Energy Performance Target 1, aimed at reducing final energy consumption, comprehensive insulation of walls, roofs, and floors yields significant reductions, with critical R-values between 4.25 and 5.75 m2K/W, compared to modest gains from window insulation alone (0.75 to 1.25 m2K/W). Energy Performance Target 2, which focuses on achieving net zero energy in single-family homes with PV systems, is possible through combined insulation measures requiring R-values of 3.75 to 6.25 m2K/W. Comprehensive insulation also shows strong potential for reducing operational CO2 emissions, with critical R-values between 3.75 and 5.25 m2K/W, while window insulation is less effective. The analysis indicates that another KPI of a 5% reduction in net energy can be achieved with a critical R-value of 0.25 m2K/W when walls, roofs, and floors are insulated together. Payback time varies by country, with higher renovation costs in Norway, while costs in Italy, Poland, and Spain are lower. The study highlights the need for integrated deep renovation strategies to effectively meet energy efficiency and CO2 reduction goals.