JAKARTA, July 24 (Reuters) - Indonesia, the world's greatest palm oil manufacturer, 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 implemented, the B40 mandate might increase biodiesel consumption 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 full implementation of B40 might be performed in 2025," energy ministry senior main Eniya Listiani Dewi said in a declaration on Tuesday.

The Indonesian Biofuel Producers Association (APROBI) stated the market had the capacity to satisfy B40 demand, with set up capacity expected to increase to 20 million KL yearly next year from 18 million KL now.

"However we will need more raw materials to meet B40 need," Ernest Gunawan, the secretary general of APROBI told Reuters on Wednesday.

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

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

But the market would need to assess "which one would be more important", GAPKI chairman Eddy Martono said, describing the possibility a boost in exports would make providing the domestic market less viable.

Indonesia's palm oil output is to reach 54.4 million tons in 2024, a 2.26% boost from last year, while exports are expected to decrease by 2.47% to 29.5 million tons as domestic consumption increased, driven by biodiesel mandate.

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