JAKARTA, July 24 (Reuters) - Indonesia, the world's biggest palm oil producer, is testing fuel with a view to increasing to 40% from 35% the share of palm-oil combined into biodiesel next year, the energy ministry said.

If executed, the B40 mandate might increase biodiesel consumption to approximately 16 million kilolitres (KL) next year, the ministry stated, from 13 million KL estimated to be consumed in 2024.

"We hope the trials could be completed in December, so that complete application of B40 might be brought out in 2025," energy ministry senior official Eniya Listiani Dewi said in a declaration on Tuesday.

The Indonesian Biofuel Producers Association (APROBI) stated the market had the capacity to meet B40 need, with installed capability expected to increase to 20 million KL yearly next year from 18 million KL now.

"However we will require more basic materials to meet B40 need," Ernest Gunawan, the secretary general of APROBI told Reuters on Wednesday.

The biodiesel industry would require 13.9 million metric lots of unrefined palm oil to produce 16 million KL biodiesel next year, from the approximated 11 million heaps required this year, he included.

Indonesia's most significant palm oil association GAPKI said a decline in exports meant there would suffice basic materials to supply the B40 mandate in the meantime.

But the market would need to examine "which one would be more important", GAPKI chairman Eddy Martono stated, describing the possibility an increase in exports would make providing the domestic market less viable.

Indonesia's palm oil output is approximated to reach 54.4 million heaps in 2024, a 2.26% increase from last year, while exports are anticipated to decline by 2.47% to 29.5 million lots as domestic intake increased, driven by biodiesel mandate.

The ministry had actually evaluated the biodiesel, combined with 40% of palm oil, on a train for the very first time previously this week, while preparing to test the B40 mix on farming machinery, power plants and in the shipping industry, it said. (Reporting by Bernadette Christina and Dewi Kurniawati; Writing by Stanley Widianto; Editing by John Mair, Savio D'Souza and Barbara Lewis)