Why is bioethanol considered to be carbon neutral?

Plant grows absorbing CO₂ (carbon dioxide) and releasing O₂ (oxygen) as part of it's natural life cycle.

The plant is then harvested and turned in ethanol.

CO₂ is released when burning the ethanol, an unavoidable part of combustion.

The amount of carbon released into the atmosphere is considered to be almost the same as the plant absorbed as part of it's life cycle, causing the two figures to effectively cancel each other out.