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

If executed, the B40 mandate might increase biodiesel usage to as much as 16 million kilolitres (KL) next year, the ministry said, from 13 million KL estimated to be consumed in 2024.

"We hope the trials could be ended up in December, so that complete implementation of B40 could be carried out in 2025,” energy ministry senior official Eniya Listiani Dewi stated in a declaration on Tuesday.

The Indonesian Biofuel Producers Association (APROBI) said the industry had the capacity to satisfy B40 demand, with installed capability expected to rise to 20 million KL annually next year from 18 million KL now.

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

The biodiesel industry would need 13.9 million metric lots of crude palm oil to produce 16 million KL biodiesel next year, from the approximated 11 million lots this year, he added.

Indonesia's biggest palm oil association GAPKI said a decline in exports suggested there would be adequate raw materials to provide the B40 required for now.

But the industry would require to evaluate “which one would be better”, GAPKI chairman Eddy Martono said, referring to the possibility a boost in exports would make supplying the domestic market less practical.

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

The ministry had actually tested the biodiesel, combined with 40% of palm oil, on a train for the very first time earlier today, while preparing to check the B40 mix on farming machinery, power plants and in the shipping market, it stated. (Reporting by Bernadette Christina and Dewi Kurniawati