diff --git a/config/module.go b/config/module.go
index 903f1cf0ddc..8d6711664ea 100644
--- a/config/module.go
+++ b/config/module.go
@@ -133,6 +133,9 @@ func (m Module) Equals(other Module) bool {
 // MergeEnvVars will merge the provided environment variables with the existing Environment, with the existing Environment
 // taking priority.
 func (m *Module) MergeEnvVars(env map[string]string) {
+	if m.Environment == nil {
+		m.Environment = make(map[string]string)
+	}
 	for k, v := range env {
 		if _, ok := m.Environment[k]; ok {
 			continue
diff --git a/config/module_test.go b/config/module_test.go
index 1d0471b092c..d6293185b5c 100644
--- a/config/module_test.go
+++ b/config/module_test.go
@@ -398,6 +398,13 @@ func TestFindMetaJSONFile(t *testing.T) {
 }
 
 func TestMergeEnvVars(t *testing.T) {
+	t.Run("nil", func(t *testing.T) {
+		m := Module{}
+		expected := map[string]string{"abc": "def", "hello": "world"}
+
+		test.That(t, func() { m.MergeEnvVars(expected) }, test.ShouldNotPanic)
+		test.That(t, m.Environment, test.ShouldResemble, expected)
+	})
 	t.Run("empty", func(t *testing.T) {
 		m := Module{Environment: map[string]string{}}
 		expected := map[string]string{"abc": "def", "hello": "world"}
diff --git a/config/reader.go b/config/reader.go
index d0bd40e22f6..e80ca240e9d 100644
--- a/config/reader.go
+++ b/config/reader.go
@@ -630,8 +630,10 @@ func processConfig(unprocessedConfig *Config, fromCloud bool, logger logging.Log
 	// add additional environment vars to modules
 	// adding them here ensures that if the parsed API key changes, the module will be restarted with the updated environment.
 	env := additionalModuleEnvVars(cfg.Cloud, cfg.Auth)
-	for _, m := range cfg.Modules {
-		m.MergeEnvVars(env)
+	if len(env) > 0 {
+		for _, m := range cfg.Modules {
+			m.MergeEnvVars(env)
+		}
 	}
 
 	// now that the attribute maps are converted, validate configs and get implicit dependencies for builtin resource models