It is common knowledge that efficiency of fuel cells is highest when no electric current is produced while when the fuel cell is really working, the efficiency is reduced by dissipation. In this paper the relation between efficiency and dissipation inside the fuel cell is formulated within the framework of classical irreversible thermodynamics of mixtures. It is shown that not only dissipation influences the efficiency but that there are also some other terms which become important if there are steep temperature gradients inside the fuel cell. Indeed, we show that the new terms are negligible in polymer-electrolyte membrane fuel cells while they become important in solid oxide fuel cells. In summary, this paper presents a formulation of non-equilibrium thermodynamics of fuel cells and provides analysis of efficiency in terms of processes inside the fuel cells, revealing some new terms affecting the efficiency. Copyright (c) 2013, Hydrogen Energy Publications, LLC. Published by Elsevier Ltd. All rights reserved.