I think, you are looking for something like below.
> cat foo.yaml
PROJECT_NAME=test
DOMAIN_NAME=test.localhost
NETWORK_NAME=traefik-network
ENVIRONMENT=dev
DRUPAL_VERSION=8
MYSQL_HOSTNAME=test.mariadb
MYSQL_DATABASE=drupal
MYSQL_USER=test
MYSQL_PASSWORD=pass
MYSQL_PORT=3306
MYSQL_ROOT_PASSWORD=pass
>
> export ENVIRONMENT=sit
> export DRUPAL_VERSION=10
> export MYSQL_PASSWORD="*****"
>
> perl -lpe ' s/(.*)=(.*)/sprintf("%s=%s","$1",$ENV{$1}? $ENV{$1}:$2)/ge ' foo.yaml
PROJECT_NAME=test
DOMAIN_NAME=test.localhost
NETWORK_NAME=traefik-network
ENVIRONMENT=sit
DRUPAL_VERSION=10
MYSQL_HOSTNAME=test.mariadb
MYSQL_DATABASE=drupal
MYSQL_USER=test
MYSQL_PASSWORD=*****
MYSQL_PORT=3306
MYSQL_ROOT_PASSWORD=pass
>
Does this help?.
Note that you can use -i switch in Perl to overwrite the file if you have write permissions
> perl -i -lpe ' s/(.*)=(.*)/sprintf("%s=%s","$1",$ENV{$1}? $ENV{$1}:$2)/ge ' foo.yaml
> cat foo.yaml
PROJECT_NAME=test
DOMAIN_NAME=test.localhost
NETWORK_NAME=traefik-network
ENVIRONMENT=sit
DRUPAL_VERSION=10
MYSQL_HOSTNAME=test.mariadb
MYSQL_DATABASE=drupal
MYSQL_USER=test
MYSQL_PASSWORD=*****
MYSQL_PORT=3306
MYSQL_ROOT_PASSWORD=pass
>
AWK solultion.
> awk -F"=" ' { $2=ENVIRON[$1]?ENVIRON[$1]:$2; printf("%s=%s\n",$1,$2) } ' foo.yaml
can be further shortened as
> awk -F"=" ' { printf("%s=%s\n",$1,ENVIRON[$1]?ENVIRON[$1]:$2) } ' foo.yaml
Handling blank lines
> awk -F"=" ' { if (!/^\s*$/) $0=sprintf("%s=%s",$1,ENVIRON[$1]?ENVIRON[$1]:$2) }1 ' foo.yaml