To be clear: Solar panels in Factorio produce no pollution, but metal smelting produces huge amounts of it, and you have to smelt to do basically anything in the game.
Combined you're just converting methane into CO2 and H2O as if you burnt it? Is it actually the case that this ends up needing less hydrocarbons than other routes for some reason?
https://en.wikipedia.org/wiki/Direct_reduced_iron
I think[1] typical plants steam reform natural gas to CO and H2 and use that to reduce iron ore below the melting temperature of iron. Which makes it energy efficient.
[1] I think == don't quote me