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Question: whats causing my fog? A/C issue.

my climate control is producing thick clouds of smoke/gas when turned on and it quickly fills the car and fogs all glass. the gas smells like some kind of chemical smell and when it condenses on the windscreen it smears when i attempt to whipe it clear. this gas also creeps out of the dash vent when the aircon is off but at a much slower rate. the only way to stop it from producing the gas that i have found is by having the climate control activated on LOW which is the lowest temp possible which is freezing cold yet it produces no cloud until the temp button is pressed to increase the temp. any ideas what may be at fault for this?