Water under the HTL conditions has different roles. It is a reaction medium and can serve as a distribution medium for homogeneous and heterogeneous catalysts. Moreover, water itself has a catalytic role in various acid — or base-catalyzed processes due to its higher degree of ionization at the increased temperature. The presence of water in some organic reactions (including hydrolysis and decarboxylation reactions) can cause a decrease of the activation energy, thus affecting their kinetics.15 Water is also directly involved in chemical reactions under the HTC conditions. Next to hydrolysis, water can oxidize some organic species in both the liquid (e. g. alcohols to ketones) and the gaseous phase (e. g. CO to CO2 in the water-gas shift reaction).

Under HTL conditions, water is a powerful polar organic solvent due to the strong decrease of its dielectric constant with temperature. Water molecules isolate the reaction intermediates and serve as a physical barrier between them (dilution effect, reducing the higher order repolymerization reactions). In this way, the reaction intermediates are stabilized.