Updated: Dec 21, 2021
Put simply, the thermic effect of food is the energy required to digest and process what you eat. For everything that you eat, a portion of it is "used up" to break it down and absorb it. What you may, or may not, know, is that some foods require more energy to do so. Protein: Up to 30% of the calories are burned during digestion. Carbohydrates: Up to 10% of the calories are burned during digestion. Fats: Up to 3% of the calories are burned during digestion.
What this means is, if you consume 100 calories of protein, only 70 of them are actually "useable" and the rest are "burned away".
So, if you are looking to lose fat, ensure you're consuming plenty of protein! The recommended daily intake is 1g per lb of bodyweight - I personally prefer to go slightly higher than this if I'm trying to lean down, as it's not just super filling, but 30% of it "doesn't count".