If you are using plant matter to feed the fungus then the carbon source for the fuel is atmospheric carbon dioxide - "pre-sequestered" carbon, if you will.
As I understand it, the issue with fossil fuel carbon emissions is we are releasing ancient carbon dioxide.
Now we can all stop feeling guilty.
At the same time though, carbon sequestration becomes crucial (assuming this organism's ability to make crude begins to be used commercially).
Oh, and don't forget about tighter emission standards, among other things.