Hydrogen is sexy but alcohol matches our existing context better. Small-scale alcohol fuel production integrated into regenerative agriculture farms is different from mass ethanol production. You can ferment anything that has starch or sugar, the leftovers from the distillation can be composted or fed to livestock. Most existing internal combustion engines can be modified to use alcohol fuel. And it's carbon-neutral.
You get much more fuel out of biomass if you add hydrogen. For example, from carbohydrates, it's basically (CH2O)n + nH2 --> (CH2)n + nH2O (hydrodeoxygenation). This can make drop-in replacements for gasoline, diesel, and jet fuel.
If you've got a ready source of hydrogen, say from molten salt oxidation of plastics, which produces "syngas" (a mixture of CO and H2), I think you could run that through water to make CO2 and more H2, feed the CO2 to a greenhouse and collect all the H2 for the reaction you described. Does that make sense?