HEADERS_ESCAPED="$(echo "$HEADERS" | sed -n 's/./\&/gp')"
# double-useless use of cat BTW
sed "s/TMPHEADERS/$HEADERS_ESCAPED/" /test/emailtemplate > /test/output

sed -n -e s/X/"$X"/ -e s/Y/"$Y" -e s/Z/"$Z"/ -e p inputfile > outputfile

while IFS= read -r line; do
  line="${line/TMPDATE/"$TMPDATE"}"
  # ...
  line="${line/TMPHEADERS/"$HEADERS"}"
  printf '%sn' "$line"
done <inputfile >outputfile

perl -e 'open(A,"header"); ## open the header file
         $h=join("",<A>); ## save its contents in a string
         while(<>){ ## go through the input file
            s/TMPHEADERS/$h/; ## replace
            print        ## print each line
         }' template

perl -e 'open(A,"header1");
         $h1=join("",<A>);
         open(B,"header2");
         $h2=join("",<B>);
         while(<>){
            s/TMPHEADERS/$h1/;
            s/TMPSOURCEIP/$h2/;
            print
         }' template

$ m4 -DTMPDATE="$(date)" -DTMPSOURCEIP="1.1.1.1" -DTMPHEADERS='include(headers.txt)' template.txt
Alert Report

Alert has triggered at Mon Sep 25 18:46:34 CEST 2017

HEADERS
-------
From foo@yahoo.com Thu Apr 25 20:18:19 2013
Return-Path: <foo@yahoo.com>
Received: from nm30-vm0.bullet.mail.ne1.yahoo.com (nm30-vm0.bullet.mail.ne1.yahoo.com [98.138.11.36])
by serv.example.com (8.14.4/8.14.4) with ESMTP id r3Q3IJVV009411
(etc.)


SOURCE IP
---------
1.1.1.1