The CO2 is consumed by the food plants. This is part of the carbon cycle, assumed that all food is grown by food plants in the colony. All hydrocarbon intake is exhaled as CO2 after digestion and metabolizing. Exactly the same amount of CO2 is inhaled by the food plants and metabolized to hydrocarbons. The carbon is neither created nor destroyed anywhere in the cycle.
The photo synthesis basically creates glucose from CO2 and water:
6 CO2 + 6 H2O → C6H12O6
The settlers basically metabolize the glucose and release CO2 and water:
C6H12O6 → 6 CO2 + 6 H2O
Carbon is stored in the settlement atmosphere as CO2. The breathable limit is about 9000 ppm (0,9% by mass), but the amount present in the Earth atmosphere is between 300 and 400 ppm (0,03% by mass). Additional carbon is stored in plants and animals as carbohydrates, or other hydrocarbons. It can also be stored as methane, or extracted chemically as pure carbon. Stored carbon helps stabilize the cycle by adding a damping/storage mechanism to the system.