Steel production from iron ore is a very energy intensive process that relies strongly on fossil fuels and is also responsible for a considerable part of the global carbon dioxide (CO2) emissions. Replacing part of the fuels or reductants with biomass will reduce the fossil derived CO2 emissions, given that the biomass is harvested in a sustainable way. In this paper the possibility of using biomass as a secondary reductant in primary steel production is studied numerically. The steel plant is optimized to minimize production costs of rolled steel by selecting the best biomass injection rate and the best state of the blast furnace under the given internal and external constraints imposed. In the analysis, raw materials and energy are given purchase prices and fossil derived CO2 emissions are subjected to a penalty fee. Emphasis is put on the preprocessing steps of biomass, including drying, torrefaction, pyrolysis (slow and fast) and grinding. An overall investment cost for the biomass preprocessing units is considered in the economic analysis. The results reveal the conditions under which it is feasible to use biomass in the plant and also provides information about the biomass pretreatment capacity worth investing in. The study indicates that slow pyrolysis seems to be the most promising concept among the three options considered, but that it is still not economically feasible with today's emission penalties. According to the estimates, the break-even point for slow pyrolysis occurs at a penalty fee of about 20 € t−1 fossil derived CO2 if one t of dry biomass costs 40 €, at a specific char injection rate of 50 kg t−1 hot metal. Fast pyrolysis requires considerably higher emission penalties to become feasible, while torrefaction proved to be infeasible with the cost structure used in the study.