The Z-Gas, also called chemical warfare agent Z0-M31-E, is a bio-engineered gas, made by Hammer Multinational, that turns people into zombies.
Justin Hammer demonstrated this weapon not long after Howard Stark reappeared in public life. He first uses it on Count Nefaria (who he suspects is an unknown blackmailer). Hammer intends to sell this weapon (if someone wants to take out an entire town, they drop a canister of Z-Gas and brain-dead monsters pop up, and eat all the survivors). Sasha warns him that he is going to create the zombie apocalypse.
Iron Man witnesses Hammer turn Killer Shrike into a zombie, and immediately after they expose Hammer's criminal empire, Hammer hops into his Titanium Man armor and launches a bomb filled with Z-Gas. Iron Man stops it with Hammer's own incendiary bomb.