Ethanol produced from fermentation can be argued to be carbon-neutral because any carbon dioxide given off when the biofuel is burnt would have been extracted from the air by photosynthesis when the plant grew. There would be no net CO2 emission into the atmosphere.
This does not take into account any energy needed to irrigate plants, fractionally distil the ethanol from the reaction mixture or process the fuel. If the energy for these processes comes from fossil fuels then the ethanol produced is not carbon neutral.