Thermodynamic methods of (energy and exergy) analysis are employed to illustrate energy use in industry. The scope for increasing energy efficiency, and the extent of exergetic `improvement potential' are examined. Poor thermodynamic performance is principally the result of exergy losses in combustion and heat-transfer processes. The late Professor Willem van Gool (a distinguished Dutch physical chemist) was at the forefront of the development and application of energy and exergy methods. He also explored the link between energy and economics. The work of van Gool and others researchers who laid down the foundations of industrial energy analysis are reviewed. These contributions are placed in the broader context of the modern paradigm of sustainable development, and their implications for the future direction of European Union energy and environmental strategies are discussed. Thermodynamic concepts have been utilised by practitioners in a variety of disciplines with interests in environmental sustainability, including ecology, economics and engineering. Widespread concern about resource depletion and environmental degradation are common to them all. Van Gool was instrumental in stimulating a dialogue across the economic and physical sciences. Some researchers view thermodynamic parameters as mirroring energy transformations within society. However, it is argued (after Hammond GP. Engineering sustainability: thermodynamics, energy systems, and the environment. Int J Energy Res 2004;28:613639.) that they may simply reflect a weak analogy or metaphor, rather than representing thermodynamic limits in a physical sense. (c) 2007 Elsevier Ltd. All rights reserved.