Clausius inequality for finite baths reveals universal efficiency improvements.

We study entropy production in nanoscale devices, which are coupled to finite heat baths. This situation is of growing experimental relevance, but most theoretical approaches rely on a formulation of the second law valid only for infinite baths. We fix this problem by pointing out that Clausius' paper from 1865 already contains an adequate formulation of the second law for finite heat baths, which can be also rigorously derived from a microscopic quantum description. This Clausius inequality shows that nonequilibrium processes are less irreversible than previously thought. We use it to correctly extend Landauer's principle to finite baths and we demonstrate that any heat engine in contact with finite baths has a higher efficiency than previously thought. Importantly, our results are easy to study, requiring only the knowledge of the average bath energy.