Asbestos???

[wonderland]

I may be asking a very silly question but what is the material that lines the engine bay? I have a 1989 S2 V6 and to me it looks like asbestos or asbestolux. I'm just a bit worried because it's looking a bit worn now and yesterday after a relatively long run it was smoking with the heat from the exhaust pipes (which are covered with some other sort of material) and was getting a bit smelly...

If it is asbestos or some other dodgy material, is there anything it can either be replaced with or covered over with?

Cheers!