The Chaos Emeralds are versions of the Chaos Emeralds from the Another Time, Another Place Zone. Like their Prime Zone counterparts, they are seven magical gem stones possessing unlimited power, including the ability to grant Super transformations.
Knuckles the Echidna used the green Chaos Emerald to lure a mysterious emerald thief into a trap created by Tails. When the thief, or rather thieves showed themselves, they where able to subvert the trap and defeat Knuckles before disappearing, taking Knuckles and the Emerald with them. (StH: #191)
Some time later, Sonic the Hedgehog harnessed the seven emeralds power, becoming Super Sonic, aboard Eggman's Space Armada. Tricking Sonic into believe he'd given up, Dr. Eggman sprung a trap on the transformed hedgehog that drained the emeralds power from his body, which he used to fire an energy beam at the earth, splitting it apart and releasing "it". After Sonic had transformed into the Werehog, Eggman deposited him and the drained emeralds out of an air-hatch, leaving them to fall to the earth. (StH: #193)