The iron and steel industry is one of the significant contributors to global greenhouse gas emissions, and iron-making is the most energy- and emission-intensive step. India is the world’s second-largest steel producer and the largest producer of sponge iron. The Indian sponge iron industry is primarily rotary kiln based and integrated with a captive power plant and a steel-making unit. This study investigates various decarbonisation options and their impact on the rotary kiln process for sponge iron production. The current process uses two different streams of coal, which can be replaced with bio-char and natural gas, whereas the low-grade dolomite can be replaced with a better grade one. The rotary cooler and magnetic separator in a conventional sponge iron plant can be replaced with a gravimetric separator enabling hot charging of sponge iron to the steel-making furnace. The savings in energy and carbon dioxide (CO2) emissions are estimated based on the changes in electricity production/demand and the reduction in CO2 emissions due to the elimination of coal. The options considered can reduce the emission intensity of crude steel production by 2,579 kg CO2/t crude steel.