In this work, a theoretical analysis was carried out on the mechanism of methane combustion occurring on single site palladium oxide species [Pd]2+ supported on Al-MCM-41 silica. Single site Pd-oxo and PdO2-superoxo structures were used to represent the active centers. Activation energies for all the elementary steps involved in the oxidation of methane into formaldehyde are presented. The competition of methane/methanol substrates on active sites was examined. It was found that the formation of methanol via the reaction of methane with the superoxo species, formed via the adsorption of O2 on reduced Pd(ii) centers, facilitates the production of the very active Pd-oxo catalytic sites.