The incineration of high-moisture solid residues generated at the recycling paper mills represents an energetically unfavourable method of resource utilization. Alternatively, hydrothermal pre-treatment is considered. In this study, low-value paper sludges from three different recycling streams were hydrothermally carbonized at 205, 225, and 245 C for 3 h. The raw feedstocks and derived hydrochars were analyzed for energy properties, chemical characteristics, surface morphology, functional groups, and combustion performance employing energy densification and mass yield quantification, scanning electron microscopy, elemental analyzer, Fourier-transform infrared spectroscopy, and thermogravimetry. The increase in reaction temperature was reported to cause a decrease in mass yield and an increase in energy densification and calorific values corresponding to 5.98%-49.35% and 10.10%-58.51% for raw fibre rejects and final sludge-derived hydrochar, respectively. Hydrothermal carbonization (HTC) had a non-significant influence on the energy densification of primary clarifier sludge-derived hydrochar. Higher reaction temperatures favoured the rate of dehydration and decarboxylation, leading to hydrochars with lower H/C and O/C ratios, thereby enhancing the overall fuel properties. The low-nitrogen and low-sulphur fuels obtained validated the effectiveness of HTC treatment to produce high-quality cleaner solid fuel. The burnout temperature was mostly reduced with an increase in HTC temperature. At HTC-205 and 225 C, the ignition temperature and the combustion performance increased as a result of the HTC reaction mechanisms. HTC effectively recovered hydrochar with increased carbon content, improved energy densification, and good combustion adequacy. Hydrochar derived from recycling mills may play a role in the energy sector as a substitute for coal or in co-combustion at coal-fired power plants.