Supply aspects related to the adoption of biomass in iron and steel making have a major contribution to the overall discussion on how CO2 emissions from this industry sector can be mitigated. Judging by the energy intensity of the iron and steel production, the requirement for biomass utilisation is expectedly large. However, substituting fossil fuels and reductants with biomass is met with technical restrictions regarding substitution potentials and feasibility limits. With biomass being a spatially variable and limited resource, the options for localising biomass conversion technologies as well as supplying both the raw material and final product becomes more complex. Therefore, a system analysis of where biomass utilisation is optimal under certain techno-economic conditions is needed.In this work, a spatially explicit techno-economic approach is employed to study how the value chains of certain upgraded biomass products can be optimised in order to achieve a least-cost strategy to facilitate the adoption of biomass in the steel industry. Under varying conditions, the impacts of carbon taxes, biomass availability, and integration potentials on the optimal cost strategy are evaluated. The scope of the work is limited to the iron and steel sector in Sweden, where ambitious national climate goals for net-zero greenhouse gas emissions are targeted by the year 2045. Results from the techno-economic optimization show a relationship between optimal plant locations and biomass availability, with increased total system costs for scenarios with high coal and coke replacement compared to gas use. The impacts of biomass conversion for metallurgical purposes is discussed against the backdrop of the forest industry.