The application of biomass-derived energy is gaining in importance due to decreasing supply of fossil fuels and growing environmental concerns. In this study, hydrothermal carbonization was used to upgrade waste biomass and increase its energy density at temperatures ranging from 150 to 375 °C and a residence time of 30 min. The produced biochars were characterized and their fuel qualities were evaluated. The biochars were found to be appropriate for direct combustion/co-combustion with low rank coals for heat production. Chemical analysis showed that the pre-treated biomass has improved fuel qualities compared to the raw biomass, such as decreased volatile matter/(volatile matter + fixed carbon) ratio, increased carbon content and lower ash content. The energy density of biochar increased with increasing hydrothermal temperature, with higher heating values close to that of lignite. The evolution of biomass under hydrothermal carbonization, as determined by FT-IR and 13C NMR, showed that most hemicellulose and cellulose were decomposed at below 250 °C while the degradation of lignin only occurs at higher temperatures. The aromaticity of biochars increased with increasing temperature, and considerable amounts of lignin fragments remained in the biochars after supercritical water treatment. The biochars had increased ignition temperatures and higher combustion temperature regions compared to raw biomass feedstock. An optimum temperature of 250 °C was found for hydrothermal carbonization of waste biomass for the production of biochars for heat generation. The present study showed that hydrothermal carbonization narrowed the differences in fuel qualities among different biomass feedstocks. It also offers a promising conversion process for the production of high energy density biochar which has potential applications in existing coal-fired boilers without modifications.