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A key challenge in the production of lignin-derived chemicals is to reduce the energy intensive processes used in their production. Here, we show that well-defined Rh nanoparticles dispersed in sub-micrometer size carbon hollow spheres, are able to hydrogenate lignin derived products under mild conditions (30 °C, 5 bar H2), in water. The optimum catalyst exhibits excellent selectivity and activity in the conversion of phenol to cyclohexanol and other related substrates including aryl ethers.