On what computer operating system is your Premiere Elements 12/12.1 running?
The burn to ISO image was not introduced into Premiere Elements Windows until Premiere Elements 13/13.1, the current version.
For additional information, please see ATR Premiere Elements Troubleshooting: PE 13: ISO Image File Size Issue
You might want to explore the use of the Phantom burner in conjunction with Premiere Elements 12/12.1
You might want to explore the free ImgBurn software
Create Image file from disc
Create Image file from Files/folders
Please review and consider. Any questions or need clarification, please do not hesitate to ask.