The direct combustion of recyclable metals has the potential to become a zero-carbon energy production alternative, much needed to alleviate the effects of global climate change caused by the increased emissions of the greenhouse gas CO2. In this work, we show that the emission of CO2 is insignificant during the combustion of pulverized sponge iron, compared to that of pulverized coal combustion. The emissions of the other harmful pollutants NOx and SO2 were 25 and over 30 times lower, respectively, than in the case of pulverized coal combustion. Furthermore, 96 %wt. of the solid combustion products consisted of micron-sized, solid or hollow hematite (α-Fe2O3) spheres. The remaining 4 %wt. of products was maghemite (γ-Fe2O3) nanoparticles. According to thermodynamic calculations, this product composition implies near-complete combustion, with a conversion above 98%. The results presented in this work strongly suggest that sponge iron is a clean energy carrier and may become a substitute to pulverized coal as fuel in existing or newly designed industrial systems.