based on CO/H2 (so-called water gas, or synthesis gas). Check out that Wiki on Fischer-Tropsch, which dates back to WWII. Problem is, the most economically viable source of CO in pure form is from coal and natural gas; recovering it from the atmosphere would require processing so much mass it would be a net energy loser. So industry actually makes its own CO for use in fuel/chemicals prod'n.
Methanol and acetic acid have been made from CO + H2 for years, so this really is just a slight variation on established technology. In fact, the more I try to figure out what's going on here (business journos often miss the important details), the more it seems to me the CO is just providing an alternative source of carbon. The hydrogen to make ethanol (C2H6O) still has to come from somewhere. The only likely candidates seem to be that the bacteria are using other substances as food (like carbohydrates) and transferring the H to the CO. Really, there's no advantage in that -- the more usual fermentation process makes ethanol without any other carbon source but the carbohydrate. The other possibility is that somehow the bacterium is causing a disproportionation of CO into reduced carbon (ethanol) and CO2 -- a GHG. The net balance just doesn't seem to offer any advantage over established processes, and that's not considering the fact that ethanol has a lower energy density than hydrocarbon fuels anyway.
I can see why you would find the idea of converting toxic waste to fuel interesting, but this particular "breakthrough" really isn't much of an improvement, if any, over stuff that's well-established already. I think when the thermodynamic and mass balance accountants are done with this, that will be clearer. You can't blame the discoverers for seeking funding, or the investors for being interested -- entrepeneurs are expected to take some risks. But the more you think about what has to be involved here, the less promising it looks.
And for comparison, industrial production of CO2 is about 5.5 billion tons per year, expressed as carbon (that would be about 20 billion tons as CO2), which dwarfs CO production. CO2 conc'n in air is about 375 ppm, too low for industrial recovery. CO is even lower, thank goodness:
http://en.wikipedia.org/wiki/Carbon_monoxide_poisoningfrom which: "In the past, motor car exhaust may have contained up to 25% carbon monoxide. However, newer cars have catalytic converters, which can eliminate over 99% of carbon monoxide produced.<10>"