<p>The catalytic conversion of lignin derivatives into specific chemicals represents a key pathway for achieving high-valued utilization of biomass. A new Ag–Co⁰/Fe_0.04Co_0.96O catalyst was constructed for the selective demethoxylation of vanillic acid derived from lignin depolymerization to produce p-Hydroxybenzoic acid. Compared to Ag–Co⁰/CoO, Fe doping suppressed Co reduction, endowing the Ag–Co⁰/Fe_0.04Co_0.96O catalyst with suitable hydrogenation activity and more abundant acidic sites. The hydrogen spillover effect inhibited decarboxylation, dehydroxylation, and benzene ring hydrogenation during the demethoxylation reaction. Oxyphilic Fe species changed the adsorption geometry of vanillic acid from parallel adsorption into twist configuration, avoiding the hydrogenation of benzene ring, and thereby improving the demethoxylation selectivity to p-Hydroxybenzoic acid. By optimizing catalyst preparation and reaction conditions to minimize decarboxylation and over-hydrogenation byproducts, the Ag–Co⁰/Fe_0.04Co_0.96O catalyst contributed to a 98.52% conversion of vanillic acid and a 89.62% selectivity to p-Hydroxybenzoic acid under 0.4&#xa0;MPa H₂, 0.4&#xa0;MPa CO₂ at 220&#xa0;°C for 2&#xa0;h. This research provided a theoretical foundation and practical guidance for the catalytic demethoxylation of phenolic acids, offering new insights into high-valued utilization pathways for biomass.</p> Graphical Abstract <p></p>