JAKARTA, July 24 (Reuters) - Indonesia, the world's greatest 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 carried out, the B40 mandate might increase biodiesel consumption to up to 16 million kilolitres (KL) next year, the ministry stated, from 13 million KL approximated to be consumed in 2024.

"We hope the trials could be finished in December, so that full application of B40 might be performed in 2025," energy ministry senior main Eniya Listiani Dewi stated in a statement on Tuesday.

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

"However we will need more raw materials to satisfy B40 need," Ernest Gunawan, the secretary general of APROBI told 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 approximated 11 million loads required this year, he added.

Indonesia's most significant palm oil association GAPKI stated a decline in exports indicated there would suffice raw 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, referring to the possibility an increase in exports would make supplying the domestic market less viable.

Indonesia's palm oil output is estimated to reach 54.4 million lots in 2024, a 2.26% boost from in 2015, while exports are anticipated to decrease by 2.47% to 29.5 million lots as domestic consumption rose, driven by biodiesel required.

The ministry had actually tested the biodiesel, mixed with 40% of palm oil, on a train for the very first time earlier today, while preparing to check the B40 mix on agriculture machinery, power plants and in the shipping industry, it stated. (Reporting by Bernadette Christina and Dewi Kurniawati; Writing by Stanley Widianto; Editing by John Mair, Savio D'Souza and Barbara Lewis)