diff --git a/src/provider/states/starting.rs b/src/provider/states/starting.rs
index 0b95fe9..6c81541 100644
--- a/src/provider/states/starting.rs
+++ b/src/provider/states/starting.rs
@@ -56,22 +56,48 @@ impl State<PodState> for Starting {
                     "Starting command: {:?} with arguments {:?}",
                     binary, os_args
                 );
+
+                // Check if environment variables are set on the container - if some are present
+                // we render all values as templates to replace configroot, packageroot and logroot
+                // directories in case they are referenced in the values
+                //
+                // If even one of these renderings fails the entire pod will be failed and
+                // transitioned to a complete state with the error that occurred.
+                // If all renderings work, the vec<(String,String)> is returned as value and used
+                // later when starting the process
+                // This works because Result implements
+                // (FromIterator)[https://doc.rust-lang.org/std/result/enum.Result.html#method.from_iter]
+                // which returns a Result that is Ok(..) if none of the internal results contained
+                // an Error. If any error occurred, iteration stops on the first error and returns
+                // that in the outer result.
                 let env_variables = if let Some(vars) = container.env() {
                     debug!(
                         "Got environment vars: {:?} service {}",
                         vars, pod_state.service_name
                     );
-                    vars.iter()
+                    let render_result = vars
+                        .iter()
                         .map(|env_var| {
-                            (
-                                String::from(&env_var.name),
-                                String::from(
-                                    &env_var.value.clone().unwrap_or_else(|| String::from("")),
-                                ),
+                            // Replace variables in value
+                            CreatingConfig::render_config_template(
+                                &template_data,
+                                &env_var.value.as_deref().unwrap_or_default(),
                             )
+                            .map(|value| (&env_var.name, value))
                         })
-                        .collect::<Vec<_>>()
+                        .collect();
+
+                    // If any single rendering failed, the overall result for the map will have
+                    // collected the Err which we can check for here
+                    match render_result {
+                        Ok(rendered_values) => rendered_values,
+                        Err(error) => {
+                            error!("Failed to render value for env var due to: {:?}", error);
+                            return Transition::Complete(Err(anyhow::Error::from(error)));
+                        }
+                    }
                 } else {
+                    // No environment variables present for this container -> empty vec
                     debug!(
                         "No environment vars set for service {}",
                         pod_state.service_name