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 combined into biodiesel next year, the energy ministry said.

If carried out, 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 ended up in December, so that complete application of B40 might be performed in 2025,” energy ministry senior official Eniya said in a declaration on Tuesday.

The Indonesian Biofuel Producers Association (APROBI) stated the industry had the capacity to satisfy 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 basic materials to satisfy B40 demand,” Ernest Gunawan, the secretary general of APROBI told Reuters on Wednesday.

The biodiesel industry would need 13.9 million metric tons 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 biggest palm oil association GAPKI said a decline in exports indicated there would be adequate basic materials to supply the B40 required for now.

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

Indonesia’s palm oil output is estimated to reach 54.4 million lots in 2024, a 2.26% boost from last year, while exports are anticipated to decline by 2.47% to 29.5 million tons as domestic intake rose, driven by biodiesel mandate.

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