The application of biomass char as a substitute for coke in the rotary hearth furnace (RHF) process for producing direct-reduced iron (DRI) is developed. The proposed method reduces the amount of required coal, production cost, and carbon emissions. Experiment results show that coconut crust carbon and bamboo carbon have good metallurgical qualities, namely high fixed carbon content, high volatile matter content, high caloric value, low ash and sulfur content. Coconut crust, as a waste product in Taiwan, is an ideal raw material for biomass char. In the RHF process, the proper molar ratio of biomass char to iron ore is (C/O)(mol) = 1. The crushing strength of DRI can be increased by adding 2.5% bentonite as binder. For a raw materials ratio of (C/O)(mol) = 1, the optimal reaction time is 15 min. (C) 2012 Elsevier Ltd. All rights reserved.