diff --git a/lib/terraspace/plugin/expander/interface.rb b/lib/terraspace/plugin/expander/interface.rb
index d145cde0..f7839d29 100644
--- a/lib/terraspace/plugin/expander/interface.rb
+++ b/lib/terraspace/plugin/expander/interface.rb
@@ -84,7 +84,7 @@ def var_value(unexpanded)
       elsif !ENV[name].blank?
         return ENV[name]
       else
-        return unexpanded
+        return ''
       end
       if downcase == "namespace" && Terraspace.config.layering.enable_names.expansion
         value = friendly_name(value)
diff --git a/spec/terraspace/provider/expander/generic_spec.rb b/spec/terraspace/provider/expander/generic_spec.rb
index 0d0e8064..f07ad469 100644
--- a/spec/terraspace/provider/expander/generic_spec.rb
+++ b/spec/terraspace/provider/expander/generic_spec.rb
@@ -3,7 +3,7 @@
   let(:props) do
     {
       bucket:         "my-bucket",
-      key:            ":env/:build_dir/terraform.tfstate", # variable notation expanded by terraspace
+      key:            ":env/:TEAM/:ENVNOTSET/:build_dir/terraform.tfstate", # variable notation expanded by terraspace
       region:         "us-west-2",
       encrypt:        true,
       dynamodb_table: "terraform_locks"
@@ -15,12 +15,14 @@
     mod
   end
 
+  before { stub_const('ENV', {'TEAM' => 'backend'}) }
+
   context "default path" do
     it "expand" do
       result = expander.expand(props)
       expect(result).to eq({
         bucket: "my-bucket",
-        key: "dev/stacks/core/terraform.tfstate",
+        key: "dev/backend/stacks/core/terraform.tfstate",
         region: "us-west-2",
         encrypt: true,
         dynamodb_table: "terraform_locks"