Concrete blocks, though used widely, have the drawback of being very high in embodied energy due to the cement they contain. They may also produce a wall which is too thick . Achieving Passivhaus standard by packing 300mm of insulation into a traditional brick and block wall produces a total thickness of about 550mm which is so thick that windows become less effective in terms of view and daylight and it actually takes up a great deal of footprint on the ground, which is expensive in terms of buildable space.
There are alternatives to blockwork above ground (and below ground if you substitute brickwork, but this is usually not much better in terms of embodied energy). Concrete blockwork is usually specified for the purposes of being loadbearing, unaffected by moisture, thermally insulating, acoustically insulating and fireproof. Usually a mixture of these.
For the purpose of constructing the below ground wall, down to the foundations, there is no real substitute for blockwork because it is not damaged by moisture (providing it is sulphate resisting, along with its mortar). Similarly for party walls there is a strong argument for their use because all the above properties are put to their best use.
However, above DPC level, timber frame construction, along with plywood, plasterboard and insulation can often do a better job than blockwork. In the case of timber post and beam, SIPS or Walter Segal construction there might not even be any need for below ground blockwork. Once again the argument for walls which are virtually fully filled with insulation to achieve PassivHaus standards may mean that blockwork simply takes up too much space.
Aircrete blocks, which have much higher insulation values than standard blocks may be a way of achieving the desired insulation without creating an unacceptably thick wall. See the Aircrete Products Association web site