What is cold junction compensation?
Because a thermocouple generates an EMF proportional to the temperature difference beween two junctions (the hot measuring junction and the cold reference junction), as described here, we need to make the cold junction be 0ºC so as to give an absolute temperature reading and so make thermocouples practicable.
In industrial applications where the thermocouple is connected to a thermocouple indicator, this is all taken care of by the electronics in the instrumentation where a separate temperature sensor (usually a thermistor) measures the ambient temperature and effectively adds the relevant voltage to the incoming signal. This process is known as cold junction compensation and it means that all we need to do is simply connect the thermocouple to the indicator for an absolute read-out of the temperature at the hot junction.
In laboratory applications it is usual for the reference junctions to be immersed in a slush of melting ice. This is because in the laboratory, the user is looking for a higher accuracy than in industrial applications and the cold junction compensation techniques used in instrumentation will introduce a small error, whereas immersing the junctions in an ice bath will not.
Traditional ice / water slush for referencing thermcouple cold junctions in laboratory applications