This study aims to convert oil extracted food waste (OEFW) into hydrochar as potential solid fuel via hydrothermal carbonization (HTC) process. The effect of HTC temperature and residence time on the physicochemical characteristic, combustion behavior, and the removal behavior of sodium and potassium were evaluated. The raw OEFW material was successfully converted into energy densified hydrochar with higher high heating value (HHV) (21.13–24.07 MJ/kg) and higher fuel ratio (0.112–0.146). In addition, carbon content in hydrochar increased to 46.92–51.82% after HTC at various operating conditions. Compared with OEFW, the hydrochar had more stable and longer combustion process with the higher ignition temperature and burnout temperature. Besides, the HTC process showed high removal rates of sodium and potassium. It was found that the HTC temperature resulted in a significant reduction of sodium and potassium in hydrochar as compared to the residence time. The highest removal rate of sodium (70.98%) and potassium (84.05%) was obtained. Overall, the results show that the HTC is a promising alternative for conventional technologies (e.g., incineration and landfill) for treatment and energy conversion of OEFW.