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 carried out, the B40 mandate could increase biodiesel consumption to as much as 16 million kilolitres (KL) next year, the ministry said, from 13 million KL approximated 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 official Eniya Listiani Dewi said in a declaration on Tuesday.

The Indonesian Biofuel Producers Association (APROBI) said the market had the to meet B40 demand, with installed capability anticipated to rise to 20 million KL yearly next year from 18 million KL now.

“However we will require more basic materials to meet B40 need,” Ernest Gunawan, the secretary general of APROBI informed Reuters on Wednesday.

The biodiesel industry would require 13.9 million metric lots 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 biggest palm oil association GAPKI stated a decline in exports implied there would be adequate basic materials to provide the B40 required for now.

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 providing the domestic market less viable.

Indonesia’s palm oil output is estimated 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 intake increased, driven by biodiesel required.

The ministry had checked the biodiesel, mixed with 40% of palm oil, on a train for the very first time earlier this week, while preparing to evaluate the B40 mix on agriculture machinery, power plants and in the shipping market, it said. (Reporting by Bernadette Christina and Dewi Kurniawati