IC engines are not limited to petroleum oil based fuels, they can run on methane, alcohol and vegetable oil to name a few options. I don't see any reason why this engine couldn't use a carbon neutral fuel like biogas or alcohol, its not some radical new tech that is completely alien, it is a refinement of existing tech.
The reason most modern cars use petrol is because that was the cheapest back in the day and the infrastructure developed to exclusively handle it. In the early days of automobiles there where a mix of gas and electric vehicles, even some hybrids, that ran on a variety of fuels.
There is no single answer, we are entering a transitional period where fossil fuels are going to be phased out but it doesn't look like there is going to be a magic bullet that will solve everything, at least not yet.
Even fusion will have its issues. Sure electricity may end up being "too cheap to meter" (we've heard that before) but for cars your going to need batteries, really good ones for long trips in some cases, and a completely rebuilt rail system to use electricity instead of diesel. Add in transporting it all, the current electric grid is already hitting its max, those rolling blackouts on the West coast awhile back where not caused by a lack of available generating capacity it was the inability to get the power to where it was needed.
There is a great deal more work that needs to be done to completely move away from combustion, of any fuel, and this engine is another step in the right direction.
Conservation is not always about replacing a technology completely, its about using what is available in an efficient and sustainable method.