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 as much as 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 finished in December, so that complete application of B40 could be carried out in 2025,” energy ministry senior official Eniya Listiani Dewi said in a statement on Tuesday.

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

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

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

Indonesia’s biggest palm oil association GAPKI said a decline in exports indicated there would be adequate basic materials to provide the B40 mandate in the meantime.

But the industry would need to evaluate “which one would be better”, GAPKI chairman Eddy Martono said, describing the possibility an increase in exports would make supplying the domestic market less feasible.

Indonesia’s palm oil output is to reach 54.4 million heaps in 2024, a 2.26% increase from in 2015, while exports are anticipated to decrease by 2.47% to 29.5 million heaps as domestic intake rose, driven by biodiesel mandate.

The ministry had tested the biodiesel, blended with 40% of palm oil, on a train for the first time earlier this week, while planning to check the B40 mix on agriculture machinery, power plants and in the shipping market, it stated. (Reporting by Bernadette Christina and Dewi Kurniawati