JAKARTA, July 23 (Reuters) - Indonesian state oil company PT Pertamina is set to test the production of jet fuel made up of 3% palm oil by the end of the year, Chief Executive Nicke Widyawati said on Thursday.

The comments come a week after the company announced its first batch of biodiesel using feedstock of 100% palm (D100) in its Dumai refinery, saying it would produce 1,000 barrels per day (bpd).

"The green jet fuel trial is part of the roadmap for Pertamina's biorefinery development in order to realise green energy in Indonesia," Widyawati said in a statement.

The new jet fuel will be made in Pertamina's existing facilities in Cilacap by "co-processing" crude oil with 3% refined, bleached and deodorised palm oil (RBDO), she said.

Like Pertamina's D100, Indonesia plans to eventually produce "green" jet fuel made up of 100% palm oil through processing RBDO straight into its refineries using catalytic cracking and hydrogen gas.

Pertamina is developing two "biorefineries" in Cilacap and Plaju with an output capacity of 6,000 bpd and 20,000 bpd to produce diesel and jet fuel made with 100% palm oil.

The biodiesel programme is a key part of the government's strategy to soak up excess supplies of palm oil and curb expensive fuel imports, one of the main contributors to the country's current account deficit.

Although biodiesel promises lower emissions, using palm oil as a feedstock raises concerns over environmental damage related deforestation.

The European Union concluded in March that palm oil causes excessive deforestation and plans to effectively phase it out as a fuel for transport. Indonesia has filed a complaint at the World Trade Organization. (Reporting by Bernadette Christian Munthe; Writing by Fathin Ungku; Editing by Richard Pullin)