In this research, the needle punched and chemical bonded nonwovens were developed by blending banana fiber and recycled polyester (r-PET) in three blend ratios (90% banana/10% r-PET, 70% banana/30% r-PET, 50% banana/50% r-PET). The developed nonwovens were characterized by thermal insulation and biodegradation properties. Results showed that all developed nonwovens have an excellent insulation performance; the thermal resistance value is in the range of 0.299 to 0.248 m2/KW. It was observed that nonwovens made from 90% banana/10% r-PET have better thermal insulation compared to other blend ratios in both techniques. It was also observed that the chemical bonded nonwovens had a 6.69% higher thermal resistance value compared to the needle punched nonwovens. A bi-layer hybrid structure made with chemical bonded nonwoven and needle punched nonwoven provided a thermal resistance value of 0.43 m2/KW. The chemical bonded nonwovens showed lower biodegradation compared to needle punched nonwovens.