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 mixed into biodiesel next year, the energy ministry said.

If carried out, the B40 mandate could increase biodiesel intake to approximately 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 execution 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) said the market had the capacity to fulfill B40 demand, with installed capability expected to increase to 20 million KL yearly next year from 18 million KL now.

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

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

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

But the industry would need to evaluate "which one would be more valuable", GAPKI chairman Eddy Martono stated, referring to the possibility a boost in exports would make supplying the domestic market less viable.

Indonesia's palm oil output is estimated to reach 54.4 million tons in 2024, a 2.26% increase from in 2015, while exports are expected to decrease by 2.47% to 29.5 million lots as domestic usage rose, driven by biodiesel mandate.

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