The conversion of biomass to biofuels as a renewable energy source is continuously gaining momentum due to the environmental concerns associated with using fossil fuels. Biomass is a cost-effective, long-term natural resource that may be converted to biofuels such as biodiesel, biogas, bio-oil, and biohydrogen using a variety of chemical, thermal, and biological methods. Thermochemical processes are one of the most advanced biomass conversion methods, with much potential and room for improvement. Among various thermochemical processes, hydrothermal liquefaction (HTL) is a promising technology that can convert higher water-content feedstocks into biofuel with significantly lower oxygen content and higher calorific value without requiring the biomass to be dried first. In HTL, temperature, pressure, residence time, catalyst, and solvent all play a vital role in bio-oil quality. This study provides a comprehensive review of the research and development on the effects of catalysts and the need to optimise existing catalysts for optimum biomass conversion into high-value bio-oil and other products. The catalyst of interest is ZSM-5, a heterogenous catalyst that has been seen to increase the hydrocarbon content and decrease oxygenated compounds and other unwanted by-products. The use and modification of this catalyst will play a vital role in generating renewable and carbon-neutral fuels.