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

If executed, the B40 mandate might increase biodiesel consumption to up to 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 full application of B40 might be performed in 2025," energy ministry senior main Eniya Listiani Dewi stated in a declaration on Tuesday.

The Indonesian Biofuel Producers Association (APROBI) said the market had the capacity to fulfill B40 need, with installed capability expected to rise to 20 million KL every year next year from 18 million KL now.

"However we will require more raw products to fulfill B40 demand," Ernest Gunawan, the secretary general of APROBI informed Reuters on Wednesday.

The biodiesel industry would require 13.9 million metric tons of crude palm oil to produce 16 million KL biodiesel next year, from the estimated 11 million heaps required this year, he added.

Indonesia's most significant palm oil association GAPKI said a decrease in exports indicated there would suffice basic materials to supply the B40 required for now.

But the industry would require to assess "which one would be more important", GAPKI chairman Eddy Martono stated, referring to the possibility an increase in exports would make supplying the domestic market less feasible.

Indonesia's palm oil output is approximated to reach 54.4 million heaps in 2024, a 2.26% boost from last year, while exports are expected to decline by 2.47% to 29.5 million tons as domestic usage rose, driven by biodiesel required.

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