Some people might think you can only use or set environment variable of the service in docker compose eg.:
my-service:
image: lts-alpine
environment:
MY_SECRET_KEY: ${MY_SECRET_KEY}
But the same ${} syntax can be used to set a version of Docker image of PostgreSQL, like in this example below:
my-service:
image: postgres:${POSTGRES_VERSION:-13}-alpine
If nothing is set, version 13 is the fallback value. Now you can set POSTGRES_VERSION environment via your shell. Or leverage the .env file of Docker:
POSTGRES_VERSION=16
When running: docker compose --env-file .env up, Docker should now use PostgreSQL v16 Alpine as Docker image.
Bonus: The docker-compose.yml filename is an old filename, use compose.yml from now. Same for other Compose files like compose.override.yml.
More info: https://docs.docker.com/compose/environment-variables/set-environment-variables/ and https://docs.docker.com/compose/environment-variables/set-environment-variables/
