Formaldehyde has many properties which make it a highly effective sterilizing agent. The earliest reports of its use as a fumigant date back to the 1880s, and it has remained the chemical of choice for laboratory fumigation for decades. Like chlorine dioxide, formaldehyde is a true gas that has excellent distribution and penetration completely filling any area it is injected into. However, to be effective, formaldehyde requires long contact times (on the order of 6-12 hours), and the gas requires a post-exposure neutralization step after the contact time is completed. This neutralization step leaves residuals which must be cleaned after the decontamination.
Formaldehyde usage may be simple and inexpensive, but concerns exist over its toxicity and carcinogenicity. In fact, the European Union has banned its use in certain applications. Formaldehyde is a toxic chemical that is classified as a Group 1 human carcinogen. Largely for these reasons, formaldehyde is being used less and less for decontamination. Gaseous chlorine dioxide is being chosen by many facilities as a safer and more effective fumigation alternative.
Learn more here from a 2011 study that compared six different microbial fumigation methods with the goal to evaluate the biocidal efficacy of alternatives to formaldehyde.