The correct answer is:
"As energy is transferred, there will always be an increase in disorder, where heat is lost to the surroundings."
This statement reflects the second law of thermodynamics, which states that in any energy transfer, some energy will become unavailable to do work, typically due to dissipation as waste heat. In any real process, there will always be an increase in entropy, or disorder, which implies that perfectly efficient engines that convert all energy into useful work without any loss are not possible.