In the steel industry, the iron making system deals with large quantities of materials and energy and so it can play a critical role in reducing emissions and production costs. More specifically, excess by-product gases should be used for electricity generation; otherwise, they lead to pollution. A life cycle analysis is performed to compare the environmental impact of an iron making system with a combined cycle power plant (CCPP), to a system producing the same amount of electricity in a coal power plant. The results for a Chinese steel plant show a 33% reduction in the energy conservation and emission reduction potential for the CCPP system, which is thus more environmentally friendly. A mathematical programming formulation is then proposed for optimal scheduling. It incorporates key technological constraints and is sensitive to hourly changing electricity prices. The outcome is a 19% increase in revenue from electricity sales compared to a schedule that does not dynamically adjust to the price profile. The results also show that emissions from by-product gases can be avoided completely. The paper ends with a sensitivity analysis to evaluate the impact of changes in product demand, gas storage and CCPP capacity, and emission cost.