The combustion (reaction with oxygen) of a pure hydrocarbon results in water and carbon dioxide and the release of energy. In the process described in this article, the reaction is effectively being driven backwards; water and carbon dioxide are being turned into diesel, with an input of energy.
In effect, diesel is acting like a battery; take electrical energy and use it to create a pure hydrocarbon that doesn't release pollutants when burnt. The combustion releases CO2 into the atmosphere of course, but no more than was extracted to make the diesel in the first place.