North Korean coal shipments to China account for roughly half of total North Korean exports to China. And North Korean coal—anthracite—is coveted.
Anthracite is one of the hardest, cleanest-burning types of coal compared to more commonly known bituminous, soft coal. The North's higher quality anthracite can also be shipped a few hundred kilometers across the water west to eastern China's Shandong province—China's largest provincial coal consumer.
Actual physical quantities of coal volume to China from North Korea are roughly flat this year. The North has contributed to 5 percent of China's total coal imports so far this year, according to Alex Whitworth, an expert on China energy for IHS, a global forecaster. But even this flat trend is telling, as North Korean-China coal quantity trade follows several years of big gains
Broadly, China's coal demand is forecast to grow for at least another decade, with most of those gains in inland regions. But China is shifting its environmental policy—or at least cleaning up the air for wealthier regions, and pushing the bad stuff inland. China has been reducing air pollution, especially in coastal and wealthy areas, said Beijing-based Whitworth in an email to CNBC.
Since 2013, tough Chinese policies have limited new heavy industries and coal-fired power plants, and shut down small-scale coal boilers and excess production capacity. The net effect has been accelerated coal demand inland, where coal prices are cheaper by as much as half compared to coastal prices.
All eyes now are on China and the U.S.—the world's two biggest carbon emitters—heading into an international climate session in 2015. It has been some two decades since the world's first climate change treaty was reached, the 1997 Kyoto Protocol. Along with Chinese President Xi Jinping, President Barack Obama this week also committed to targets for cutting carbon emissions.
Already China's energy-intensive industrial output is gradually slowing, as the services sector gains a foothold.
China's services-related output accounted for the largest contribution to real GDP growth in seven of the last eight quarters, according to Brian Jackson, senior economist for IHS Economics. Looking ahead, IHS forecasts services to continue to gain share in the economy, rising to about 50 percent of output over the next decade compared to about 46 percent now, said Beijing-based Jackson in an email to CNBC.