Energy is lost at each trophic level primarily due to heat dissipation, waste production, and non-consumed parts of organisms.

To understand this energy loss in detail, we can refer to the ‘10% rule’ in ecology. This principle indicates that when energy is transferred from one trophic level to the next, approximately $10\%$ of the energy is retained, while the remaining $90\%$ is lost. This loss occurs through several mechanisms.

Firstly, a significant portion of energy is lost as heat. All organisms utilize energy for metabolic processes such as growth, reproduction, and maintaining bodily functions. During these processes, much of the energy is converted into heat, which dissipates into the environment. This is particularly pronounced in warm-blooded animals, which expend a considerable amount of energy to regulate their body temperature.

Secondly, not all parts of an organism are consumed or are digestible by the next trophic level. For instance, components like bones, scales, fur, and feathers are often left uneaten or are indigestible, meaning the energy contained within these parts does not transfer to the subsequent level. Consequently, this energy is lost from the food chain.

Thirdly, energy is lost through the production of waste. All organisms generate waste products, such as urine and feces, which contain energy that is not utilized by the organism. As a result, this energy becomes unavailable to the next trophic level.

Lastly, not all organisms within a trophic level are consumed by those at the next level. Some may die and decompose without being eaten, leading to a loss of the energy contained in those organisms from the food chain.

In summary, energy is lost at each trophic level due to heat dissipation, waste production, non-consumed parts of organisms, and death without consumption. This inefficiency in energy transfer through trophic levels results in a decrease in available energy at each successive level.