In this study, hydrothermal carbonization (HTC) of spruce wood was studied at different temperatures (200−260 °C) and residence times (2−48 h). An increase in the temperature and residence time resulted in higher heating values of hydrochars. The effect of temperature on the hydrochar yield and carbon content was more pronounced than the residence time. Two sulfonic acid catalysts were explored for the first time in the HTC of spruce wood at 240 °C for 24 h. The impact of sulfonic acid type and concentration on hydrochar yields and characteristics was investigated. Among the tested acids, methanesulfonic acid (MSA) had a significant effect on HTC, producing hydrochar with increased fixed carbon content and a higher heating value compared to noncatalytic runs and runs with dodecyl benzenesulfonic acid (DBSA) under identical conditions. The highest fuel ratio obtained was 1.47 with MSA at a concentration of 0.01 M. A detailed quantitative analysis of the aqueous phase from HTC processing using gas chromatography helped to elucidate the differences between the tested acids and demonstrated promoted lignin depolymerization with increasing MSA concentration. The use of sulfonic acid significantly increased the yield of levulinic acid in the aqueous phase. Overall, these findings highlight the potential of sulfonic acid catalysts in enhancing the efficiency and product quality of HTC processes, providing insights into optimizing biomass conversion for sustainable energy production and biocoal synthesis.