The theory of exergy analysis is summarized. The basis for the selecti
on of the concentration of a datum level species from which the standa
rd chemical exergy is calculated is explained. The exergy balance equa
tion is presented and the Law of Exergy Loss derived. Expressions are
presented for a thermodynamic efficiency which is a measure of the per
formance of an industrial process relative to the ideal reversible pro
cess. The characteristic of energy and exergy are summarized. The theo
ry is applied to the iron blast furnace and the results of analysis co
mpared with results from the lead blast furnace. The iron blast furnac
e operates close to equilibrium in the stack region; hence the iron fu
rnace is considerably more efficient in the thermodynamic sense. This
is mainly a consequence of purity of the feed materials. This type of
process assessment is not possible from an energy balance.