The development of hydrogen plasma smelting reduction as a CO2 emission-free steel-making process is a promising approach. This study presents a concept of the reduction of haematite using hydrogen thermal plasma. A laboratory scale and pilot scale hydrogen plasma smelting reduction (HPSR) process are introduced. To assess the reduction behaviour of haematite, a series of experiments have been conducted and the main parameters of the reduction behaviour, namely the degree of hydrogen utilization, degree of reduction and the reduction rate are discussed. The thermodynamic aspect of the hematite reduction is considered, and the pertinent calculations were carried out using FactSageTM 7.2. The degree of hydrogen utilization and the degree of reduction were calculated using the off-gas chemical composition. The contribution of carbon, introduced from the graphite electrode, ignition pin and steel crucible, to the reduction reactions was studied. The degree of reduction of haematite, regarding H2O, CO and CO2 as the gaseous reduction products, was determined. It is shown that the degree of hydrogen utilization and the reduction rate were high at the beginning of the experiments, then decreased during the reduction process owing to the diminishing of iron oxide. Conducting experiments with the high basicity of slag B2 = 2 led to a decrease of the phosphorus concentration in the produced iron.