Batman locates Scarecow at Ace Chemicals but he'll have to rescue some workers before he can face him.
This is the first "dungeon" area of the game. It's fate wasn't known at the time, so it's explored thoroughly, even though there's no Riddler stuff to find. It takes a while to discover the way forward after rescuing the first worker, you can skip all the searching and looking around after that part here 59:27.
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