Hydrogen plasma smelting reduction (HPSR) is a part of a new generation of iron- and steel-making processes without 〖CO〗_2 emission. In the HPSR process, hydrogen molecules are injected into the plasma arc zone via a hollow graphite electrode and are atomized (H), ionized hydrogen and excited state due to the high temperature of the plasma arc. Thermodynamic calculations show that the Gibbs free energy changes for hematite reduction reactions with different hydrogen species depend on the kind of hydrogen species in the plasma state. The accelerated electrons are responsible for the transfer of energy among the particles in the plasma arc. Electron collisions with hydrogen molecules lead to the generation of excited hydrogen species. Therefore, the number of free electrons in the plasma state, the degree of ionization and the lifetime of excited particles should be considered as the main parameters influencing the reduction reaction rates of iron oxides. Moreover, the density of the hydrogen-activated species in the plasma arc, which defines the ionization rate of hydrogen, is a function of the temperature and the amount of injected molecular hydrogen in the arc zone. This study evaluates the thermodynamic aspects of hydrogen plasma arc and iron oxide reduction reactions in the plasma state.