Is it true that only cables with a blue outer sheath must be used in "intrinsically safe circuits"?

No, that is not strictly true. The relevant standard (VDE 0165) merely stipulates that cables in intrinsically safe circuits must be labelled accordingly so that they can be identified as part of such circuits. In cases where cables in intrinsically safe circuits are to be indicated by their colour, the outer sheath must be light blue. Cables which do not have a blue sheath but are still used in intrinsically safe circuits must be identified by other means, to be agreed with the relevant testing engineer/certifier. This can be done, for example, using blue cable ducts or by affixing FLEXIMARK® marking products. In some cases, cables forming part of intrinsically safe circuits can also be installed such that they are spatially separated from other cables. An exception to these rules is when the intrinsically safe or all non-intrinsically safe cables and wires are armoured, metal-sheathed or screened, in which case no separate identification of intrinsically safe cables and wires is required. The decision as to how cables are installed or distinguished in intrinsically safe environments must be made by the user in conjunction with the relevant testing institute

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