To develop a method for converting paper sludge-derived far to useful petroleum-related chemicals, the catalytic cracking of the far over zirconia-supporting iron oxide catalysts (ZrO2/FeOx catalyst) in it Steam atmosphere was examined. Useful aromatics such its toluene, ethylbenzene. and styrene are included in the tar at coin positions of approximately 63% with the remaining 37% being unknown components. BY applying the ZrO2/FeOx catalyst, the unknown components were effectively decomposed without decomposing the useful chemicals existing in the tar and the concentrations or tin known components were decreased front 37 to 11%. Moreover acetone and phenol were newly produced. The lattice oxygen of the FeOx was the active site for the catalytic decomposition of the unknown components in the tar, and the ZrO2 on FeOx had activity for decomposing H2O molecules, thereby yielding active oxygen species. The oxygen active species spilled over oil file FeOx surface to regenerate the oxygen defects Formed during the reaction. Accordingly, the catalytic activity and stability were due to the consumption and regeneration of the lattice oxygen.