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When the heat energy is produced, either internally or externally to the engine, it produces a sudden expansion in the gas in the cylinder which drives the piston down, so transforming to mechanical energy. Not all the thermal energy can be used though, and some is lost to the engine's exhaust and cooling system. In a stationary engine some of this heat could be recovered and used, but it is at relatively low temperature so only suitable for low temperature processes like heating a building. In a moving vehicle this heat is just lost to the environment, which places a limit to the efficiency of the engine.

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Q: In a heat engine what happens to thermal energy that is converted from chemical energy?
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