diff --git a/pkg/config/config.go b/pkg/config/config.go
index 15e797b36..1a5370a39 100644
--- a/pkg/config/config.go
+++ b/pkg/config/config.go
@@ -563,6 +563,10 @@ func NewConfig(userConfigPath string) (*Config, error) {
 		return nil, err
 	}
 
+	if err := config.setupEnv(); err != nil {
+		return nil, err
+	}
+
 	return config, nil
 }
 
@@ -1187,3 +1191,23 @@ func (c *Config) ImageCopyTmpDir() (string, error) {
 
 	return "", errors.Errorf("invalid image_copy_tmp_dir value %q (relative paths are not accepted)", c.Engine.ImageCopyTmpDir)
 }
+
+// setupEnv sets the environment variables for the engine
+func (c *Config) setupEnv() error {
+	for _, env := range c.Engine.Env {
+		splitEnv := strings.SplitN(env, "=", 2)
+		if len(splitEnv) != 2 {
+			logrus.Warnf("invalid environment variable for engine %s, valid configuration is KEY=value pair", env)
+			continue
+		}
+		// skip if the env is already defined
+		if _, ok := os.LookupEnv(splitEnv[0]); ok {
+			logrus.Debugf("environment variable %s is already defined, skip the settings from containers.conf", splitEnv[0])
+			continue
+		}
+		if err := os.Setenv(splitEnv[0], splitEnv[1]); err != nil {
+			return err
+		}
+	}
+	return nil
+}
diff --git a/pkg/config/config_local_test.go b/pkg/config/config_local_test.go
index 154c65eab..a49445ca1 100644
--- a/pkg/config/config_local_test.go
+++ b/pkg/config/config_local_test.go
@@ -203,12 +203,15 @@ var _ = Describe("Config Local", func() {
 
 	It("should return containers engine env", func() {
 		// Given
-		expectedEnv := []string{"http_proxy=internal.proxy.company.com", "foo=bar"}
+		expectedEnv := []string{"super=duper", "foo=bar"}
 		// When
 		config, err := NewConfig("testdata/containers_default.conf")
 		// Then
 		gomega.Expect(err).To(gomega.BeNil())
 		gomega.Expect(config.Engine.Env).To(gomega.BeEquivalentTo(expectedEnv))
+		gomega.Expect(os.Getenv("super")).To(gomega.BeEquivalentTo("duper"))
+		gomega.Expect(os.Getenv("foo")).To(gomega.BeEquivalentTo("bar"))
+
 	})
 
 	It("Expect Remote to be False", func() {
diff --git a/pkg/config/testdata/containers_default.conf b/pkg/config/testdata/containers_default.conf
index d54db1514..902568efb 100644
--- a/pkg/config/testdata/containers_default.conf
+++ b/pkg/config/testdata/containers_default.conf
@@ -137,7 +137,7 @@ conmon_path = [
 # For example "http_proxy=internal.proxy.company.com".
 # Note these environment variables will not be used within the container.
 # Set the env section under [containers] table, if you want to set environment variables for the container.
-env = ["http_proxy=internal.proxy.company.com", "foo=bar"]
+env = ["super=duper", "foo=bar"]
 
 # Container init binary
 #init_path = "/usr/libexec/podman/catatonit"