Single-atom catalysts usually comprise positively charged atomically dispersed metal cations on oxide supports. Neutral atoms on oxides are synthetically challenging, and their performance in catalytic reactions remains ambiguous. Here, we shed light on this question with the design of Pd single-atom catalysts on polyoxometalates. Depending on the composition of the support, Pd can either exhibit oxidation states of 0 or 2+. We show that this difference is decisive for the C-O bond hydrogenolysis while displaying negligible effects on the C=O bond hydrogenation. The selective conversion of 5-hydroxymethylfurfural (5-HMF) to 2,5-dimethylfuran (2,5-DMF), a key renewable fuel compound, was shown to occur at 253 K with reaction rates up to 71.0 per hour.