What is a cold (reference) junction for thermocouples?

Cold, or reference junction, is the end of a thermocouple that provides a reference point.

Thermocouples measure the difference in temperature between two junctions. They do NOT measure actual temperature. The sensing junction is where the thermocouple wires are welded (or otherwise connected) together, and located at a point where the temperature is desired. The other junction is typically located where it is connected to instrumentation (measuring device or transmitter). This is known as the cold or reference junction. Thermocouple millivolt tables and mathematical formulas are based on a cold junction temperature of 0°C. To determine actual temperature, the instrumentation must “adjust” for the difference between ambient temperature and 0°C. This adjustment is known as cold junction compensation.