This paper presents a preliminary investigation into ultralight earth (ULE) insulation materials developed using locally sourced clay and bio-fibers from Finnish agriculture and industrial side streams. The study responds to the urgent need for construction materials that have low carbon footprint and high carbon storage. This would support Finland’s legally binding 2035 carbon neutrality target and broader bioeconomy objectives. Four ULE composites, based on rye straw, hemp shives, reed chaff, and recycled wood, were developed in collaboration with a local clay craftsperson and tested for dry density and thermal conductivity. The resulting materials exhibited dry densities below 450 kg/m3, qualifying as ultralight, and achieved thermal conductivity values as low as 0.047 W/(m·K). These results are competitive with conventional insulation materials, such as mineral wool and expanded polystyrene. Notably, the straw-, reed-, and hemp-based ULEs met the thermal insulation threshold of 0.065 W/(m·K), as defined in European guidelines for ETICS, while all formulations qualified as thermal insulating mortars under EN 998-1:2017. These findings demonstrate the feasibility of ULE materials as sustainable alternatives for thermal insulation in subarctic climates. The study also lays the groundwork for future optimisation of mix designs to enhance performance and durability, paving the way for wider adoption in both new and renovated buildings. This work contributes to closing the knowledge gap on ULE applications in Nordic countries and supports a circular, low-carbon construction sector in Finland.