The Chemical Plant Zone was a facility controlled by Dr. Eggman, that existed on Mobius when it was rewritten by the first Genesis Wave. It's name comes from the sheer volume of chemicals produced here, most-if not all-of which are known to be toxic.
During the period when Dr. Eggman's Operation: Clean Sweep altered reality and reshaped Mobius, the Chemical Plant Zone was an industrial zone controlled by Dr. Eggman. According to Tails, this area had so much chemical fuel it seemed Eggman was "polluting for pollution's sake". It contained many pipes that could be used to travel throughout the plant, yellow crates that defied gravity, and it could be flooded with Mega Muck. Sonic, Tails, and the Freedom Fighters passed through this zone and split up after, with Sonic and Tails heading to Metropolis Zone and the Freedom Fighters heading to Oil Ocean Zone. (StH: #228)