--I see an increase in carbon released.--
But the NET released (burned less recycled) is less.
Say now we are releasing X units. With biofuels we will be releaseing Y units where Y is greater than X. But we will be capturing Z units.
The net will be Y - Z which will be less than Z.
The only way the net released will be less is if you do not convert all the coal/carbon to fuel, if you stockpile it.
The carbon containing residue is to be used for animal feed, not stockpiled. I basically see all the carbon scavanged from the atmosphere returned in a relatively short carbon cycle. The carbon corn cycle is neutral in the long run.
Reading through the conflicting reports, the whole corn ethanol fuel cycle is a net loss of fossil fuel generated energy. We will be using fossil fuel to put additional carbon into the atmosphere. Using nuclear power for ethanol production is the only way I see to avoid adding carbon.
If you are going to use nuclear, use it for all electric cars with super batteries/capacitors.