Harvesting, transportation, fermentation are high co2 emitters

They don't have to be. They are currently because equipment and vehicles mostly run on gasoline. If the farm equipment and fuel transporters were modified to run on the ethanol it would be co2 neutral or somewhat co2 negative as the co2 harvested by the plants would be stored for later release when burning the fuel or fermenting before burning.

Heating for fermentation and distilling could also be powered by co2 neutral biomass such as crop byproducts or well managed wood forests. Usually fertilizer is less necessary with organic and permaculture growing practices since the natural diversity of plants' keeps the soil healthy and well nourished.

Land owners making ethanol precursors would want high yield crops.

Corn is actually one of the lower yield corps per acre when grown for ethanol. It averages around 350 gallons per acre. Crops such as sugar cane, sugar beets, sorghum, cassava, cattails and even natural prairie grasses all produce more than that per acre.

Corn is used so widely for ethanol in the US because of all the government subsidies keeping its price artificially low.

Well managed plant fuel is definitely better for the environment than fossil fuels. Brazil has been running most of its cars on ethanol grown from the byproducts of sugar cane production since they forced the carmakers there to adopt their engines to run it in response to the 1970s oil price shock.