(continued ...) In standard energy efficient furnaces or boilers, that remaining 15% to 20% of waste energy is needed to be waste. Here is why. It is needed to protect you, the furnace/boiler and chimney/flue. First, hot air rises and really hot air rises fast; carrying the combustion products up the chimney. This gets carbon monoxide and a bunch of other nasties [sic] out of your house. Second, the waste heat keeps the volatile left-over products of combustion in vapor form. If not, over time they accumulate inside the flue/chimney and begin creating the things needed for a chimney fire. Third, the combustion product mix contains water vapor, various forms of nitrogen, sulfur and other stuff. If these gases condense to liquid then various acids are created along with liquid water. These acids destroy the innards of standard energy efficient furnaces as well as standard B-vent metal flues and masonry chimneys. It is necessary to accept a minimum 15% loss due to the equipment and system design. But there is no need to accept any more waste than the minimum required.
The combustion process, to get heat energy, is as simple as I described earlier. Input the fuel-air mixture, light it and let it burn. The hot fumes pass through a heat exchanger and whatever is left over goes up the flue. There are some equipment design tricks to move from 80 to 85% using double pass heat exchangers, turbulators and other such things.
Fossil fuel fired high energy efficient equipment can have energy efficiencies upwards of 95%. Another term used for these systems is condensing furnaces or condensing boilers. And the word 'condensing' is thermodynamically-key to how they accomplish that extra energy efficiency: phase change. A similar phase change process is discussed in an air conditioning article at EnergyWrite.com.