Toxic Gas is a damaging gaseous Material that is created alongside Toxic Rock when Toxic Sludge reacts with Lava and the Kiaskivi. Not to be confused with Flammable Gas, which is a darker green. Similar to Toxic Sludge, Toxic Gas has a faint yellow-green glow.
Even extremely small amounts of toxic gas will do damage on contact with the player, so watch out. Having either of the Perks "Gas Fire" or "Toxic Immunity" will protect you from it.
While it can occur in any biome where both Toxic Sludge and Lava are present, it will most commonly be encountered in the Coal Pits.