Optimum insulation thickness for a piping system is investigated using a novel method that combines exergy and environmental analysis. Rockwool and glasswool are chosen as insulation materials for the system and the analysis was carried out for the city of Bilecik, located in the Marmara Region of Turkey. Investigation is performed for the different nominal pipe sizes (NPS or diameter nominal: DN) of 50, 100 and 150. The environmental impacts of the various parameters are described. Results for the environmental impact of the system, the net environmental saving, exergetic heat loss, the net exergy saving, fuel consumption and CO2 emissions according to insulation thickness are presented. Optimum points are calculated as 0.109 m, 0.126 m and 0.137 m for DN 50, 100, and 150, respectively for the glasswool. Optimum insulation thickness for the rockwool was determined as 0.064 m, 0.073 m and 0.079 for DN 50, 100, and 150, respectively.