The potential implementation of ruthenium-based catalysts in polyvinyl chloride production via acetylene hydrochlorination is hindered by their inferior activity and stability compared to gold-based systems, despite their 4-fold lower price. Combining in depth characterization and kinetic analysis we reveal the superior activity of ruthenium nanoparticles with an optimal size of 1.5 nm hosted on nitrogen-doped carbon (NC) and identify their deactivation modes: (i) nanoparticle redispersion into inactive single atoms and (ii) coke formation at the metal sites. Tuning the density of the NC carrier enables a catalytic encapsulation of the ruthenium nanoparticles into single layer graphene shells at 1073 K that prevent the undesired metal redispersion. Finally, we show that feeding O2 during acetylene hydrochlorination limits coke formation over the nanodesigned ruthenium catalyst, while the graphene layer is preserved, resulting in a stability increase of 20 times, thus rivalling the performance of gold-based systems.