diff --git a/src/envars/cli.py b/src/envars/cli.py
index f25e3ef..31d09db 100644
--- a/src/envars/cli.py
+++ b/src/envars/cli.py
@@ -33,7 +33,7 @@
 
 def _resolve_and_print_context(
     ctx: typer.Context, loc: str | None, env: str | None
-) -> tuple[VariableManager, str, str | None]:
+) -> tuple[VariableManager, str | None, str | None]:
     """Resolves location and environment, printing debug info if verbose."""
     if env:
         os.environ["ENVARS_ENV"] = env
@@ -42,14 +42,33 @@ def _resolve_and_print_context(
 
     resolved_loc = loc
     if resolved_loc is None:
-        resolved_loc = get_default_location_name(manager)
-        if resolved_loc is None:
-            error_console.print("[bold red]Error:[/] Could not determine default location. Please specify with --loc.")
+        if not manager.locations:
+            # No locations configured, so no need to resolve a default or error
+            if verbose:
+                console.print("[dim]DEBUG: No locations configured, proceeding without a specific location.[/dim]")
+            resolved_loc = None  # Explicitly set to None
+        else:
+            # Locations are configured, try to auto-detect
+            resolved_loc = get_default_location_name(manager)
+            if resolved_loc is None:
+                error_console.print(
+                    "[bold red]Error:[/] Could not determine default location. Please specify with --loc."
+                )
+                raise typer.Exit(code=1)
+            if verbose:
+                console.print(f"[dim]DEBUG: Auto-detected location: '{resolved_loc}'[/dim]")
+    else:
+        # A location was explicitly provided, validate it
+        if not manager.locations:
+            error_console.print(
+                "[bold red]Error:[/] 'locations' are not configured for use in the project. Cannot use '--loc'."
+            )
+            raise typer.Exit(code=1)
+        if not any(l.name == resolved_loc for l in manager.locations.values()):
+            error_console.print(f"[bold red]Error:[/] Location '{resolved_loc}' not found in configuration.")
             raise typer.Exit(code=1)
         if verbose:
-            console.print(f"[dim]DEBUG: Auto-detected location: '{resolved_loc}'[/dim]")
-    elif verbose:
-        console.print(f"[dim]DEBUG: Using specified location: '{resolved_loc}'[/dim]")
+            console.print(f"[dim]DEBUG: Using specified location: '{resolved_loc}'[/dim]")
 
     final_env = env
     if final_env is None:
@@ -59,7 +78,7 @@ def _resolve_and_print_context(
     elif verbose:
         console.print(f"[dim]DEBUG: Using specified environment: '{final_env}'[/dim]")
 
-    return manager, resolved_loc, env
+    return manager, resolved_loc, final_env
 
 
 @app.command(name="init")
@@ -67,7 +86,7 @@ def init_envars(
     ctx: typer.Context,
     app_name: str = typer.Option(..., "--app", "-a", help="Application name."),
     env: str = typer.Option(..., "--env", "-e", help="Comma-separated list of environments."),
-    loc: str = typer.Option(..., "--loc", "-l", help="Comma-separated list of locations in name:id format."),
+    loc: str = typer.Option("", "--loc", "-l", help="Comma-separated list of locations in name:id format."),
     kms_key: str = typer.Option(None, "--kms-key", "-k", help="Global KMS key."),
     force: bool = typer.Option(False, "--force", help="Overwrite existing envars.yml file."),
     description_mandatory: bool = typer.Option(
@@ -88,14 +107,15 @@ def init_envars(
     for env_name in environments:
         manager.add_environment(EnvarsEnvironment(name=env_name))
 
-    locations = [l.strip() for l in loc.split(",")]
-    for loc_item in locations:
-        try:
-            name, loc_id = loc_item.split(":", 1)
-            manager.add_location(Location(name=name, location_id=loc_id))
-        except ValueError as e:
-            error_console.print(f"[bold red]Error:[/] Invalid location format: {loc_item}. Use name:id.")
-            raise typer.Exit(code=1) from e
+    if loc:
+        locations = [l.strip() for l in loc.split(",")]
+        for loc_item in locations:
+            try:
+                name, loc_id = loc_item.split(":", 1)
+                manager.add_location(Location(name=name, location_id=loc_id))
+            except ValueError as e:
+                error_console.print(f"[bold red]Error:[/] Invalid location format: {loc_item}. Use name:id.")
+                raise typer.Exit(code=1) from e
 
     try:
         write_envars_yml(manager, file_path)
@@ -310,26 +330,26 @@ def add_env_var(
     environment_name = None
     location_id = None
 
-    if env and loc:
-        scope_type = "SPECIFIC"
-        environment_name = env
-        # Find location_id by name
+    if loc:
+        if not manager.locations:
+            error_console.print(
+                "[bold red]Error:[/] 'locations' are not configured for use in the project. Cannot use '--loc'."
+            )
+            raise typer.Exit(code=1)
         found_loc = next((l for l in manager.locations.values() if l.name == loc), None)
         if not found_loc:
             error_console.print(f"[bold red]Error:[/bold red] Location '{loc}' not found.")
             raise typer.Exit(code=1)
         location_id = found_loc.location_id
+
+    if env and loc:
+        scope_type = "SPECIFIC"
+        environment_name = env
     elif env:
         scope_type = "ENVIRONMENT"
         environment_name = env
     elif loc:
         scope_type = "LOCATION"
-        # Find location_id by name
-        found_loc = next((l for l in manager.locations.values() if l.name == loc), None)
-        if not found_loc:
-            error_console.print(f"[bold red]Error:[/bold red] Location '{loc}' not found.")
-            raise typer.Exit(code=1)
-        location_id = found_loc.location_id
 
     new_var_value = VariableValue(
         variable_name=var_name,
diff --git a/src/envars/main.py b/src/envars/main.py
index a962b77..2b25664 100644
--- a/src/envars/main.py
+++ b/src/envars/main.py
@@ -200,10 +200,11 @@ def write_envars_yml(manager: VariableManager, file_path: str):
             "kms_key": manager.kms_key,
             "description_mandatory": manager.description_mandatory,
             "environments": sorted(manager.environments.keys()),
-            "locations": locations_data,
         },
         "environment_variables": {},
     }
+    if locations_data:
+        data["configuration"]["locations"] = locations_data
 
     # Populate environment_variables
     sorted_vars = sorted(manager.variables.items())
@@ -265,10 +266,11 @@ def write_envars_yml(manager: VariableManager, file_path: str):
         if any(data["configuration"].values()):
             config_data = {"configuration": data["configuration"]}
             # Sort locations list of dicts
-            config_data["configuration"]["locations"] = sorted(
-                config_data["configuration"]["locations"],
-                key=lambda x: list(x.keys())[0],
-            )
+            if "locations" in config_data["configuration"]:
+                config_data["configuration"]["locations"] = sorted(
+                    config_data["configuration"]["locations"],
+                    key=lambda x: list(x.keys())[0],
+                )
             yaml.dump(config_data, f, sort_keys=False, Dumper=yaml.Dumper)
             f.write("\n")
 
@@ -362,7 +364,7 @@ def _check_for_circular_dependencies(variables: dict[str, str | Secret]):
 
 def _get_resolved_variables(
     manager: VariableManager,
-    loc: str,
+    loc: str | None,
     env: str | None,
     decrypt: bool,
 ) -> dict[str, str | Secret]:
@@ -375,7 +377,8 @@ def _get_resolved_variables(
     if env not in manager.environments:
         raise ValueError(f"Environment '{env}' not found in configuration.")
 
-    if not any(l.name == loc for l in manager.locations.values()):
+    # Only validate location if a specific one is provided and locations are configured
+    if loc is not None and not any(l.name == loc for l in manager.locations.values()):
         raise ValueError(f"Location '{loc}' not found in configuration.")
 
     resolved_vars = {}
diff --git a/tests/test_cli.py b/tests/test_cli.py
index 76d3c72..fccceed 100644
--- a/tests/test_cli.py
+++ b/tests/test_cli.py
@@ -70,6 +70,30 @@ def test_init_command(tmp_path):
     assert data["configuration"]["description_mandatory"] is False
 
 
+def test_init_command_no_locations(tmp_path):
+    file_path = tmp_path / "envars_no_loc.yml"
+    result = runner.invoke(
+        app,
+        [
+            "--file",
+            str(file_path),
+            "init",
+            "--app",
+            "MyApp",
+            "--env",
+            "dev,prod",
+        ],
+    )
+    assert result.exit_code == 0
+    assert "Successfully initialized" in result.stdout
+
+    data = read_yaml_file(file_path)
+    assert data["configuration"]["app"] == "MyApp"
+    assert data["configuration"]["environments"] == ["dev", "prod"]
+    assert "locations" not in data["configuration"]
+    assert data["configuration"]["description_mandatory"] is False
+
+
 def test_add_default_variable(tmp_path):
     file_path = create_envars_file(tmp_path)
     result = runner.invoke(app, ["--file", file_path, "add", "MY_VAR=my_value"])
@@ -201,12 +225,24 @@ def test_add_variable_invalid_format(tmp_path):
 
 
 def test_add_variable_non_existent_location(tmp_path):
-    file_path = create_envars_file(tmp_path)
+    initial_content = """
+configuration:
+  locations:
+    - my_loc: "loc123"
+"""
+    file_path = create_envars_file(tmp_path, initial_content)
     result = runner.invoke(app, ["--file", file_path, "add", "MY_VAR=value", "--loc", "non_existent_loc"])
     assert result.exit_code == 1
     assert "Location 'non_existent_loc' not found" in result.stderr
 
 
+def test_add_variable_with_loc_but_no_locations_configured(tmp_path):
+    file_path = create_envars_file(tmp_path)
+    result = runner.invoke(app, ["--file", file_path, "add", "MY_VAR=value", "--loc", "some_loc"])
+    assert result.exit_code == 1
+    assert "locations' are not configured" in result.stderr
+
+
 def test_add_variable_non_existent_environment_for_specific(tmp_path):
     initial_content = """
 configuration:
@@ -471,6 +507,18 @@ def test_print_invalid_loc(tmp_path):
     assert "Location 'other_loc' not found" in result.stderr
 
 
+def test_output_invalid_loc_no_locations_configured(tmp_path):
+    initial_content = """
+configuration:
+  environments:
+    - dev
+"""
+    file_path = create_envars_file(tmp_path, initial_content)
+    result = runner.invoke(app, ["--file", file_path, "output", "--env", "dev", "--loc", "other_loc"])
+    assert result.exit_code == 1
+    assert "'locations' are not configured" in result.stderr
+
+
 def test_exec_invalid_env(tmp_path):
     initial_content = """
 configuration:
@@ -1253,7 +1301,7 @@ def test_add_value_from_file(tmp_path):
 -----END OPENSSH PRIVATE KEY-----"""
     value_file.write_text(file_content)
 
-    result = runner.invoke(
+    runner.invoke(
         app,
         [
             "--file",
@@ -1265,13 +1313,28 @@ def test_add_value_from_file(tmp_path):
             str(value_file),
         ],
     )
-    assert result.exit_code == 0
-    assert "Successfully added/updated MY_VAR" in result.stdout
-
     data = read_yaml_file(file_path)
     assert data["environment_variables"]["MY_VAR"]["default"] == file_content
 
 
+def test_output_command_no_locations(tmp_path):
+    initial_content = """
+configuration:
+  app: test-app
+  environments:
+    - prod
+    - staging
+environment_variables:
+  TEST:
+    default: "test_value"
+"""
+    file_path = create_envars_file(tmp_path, initial_content)
+
+    result = runner.invoke(app, ["--file", file_path, "output", "--env", "prod"])
+    assert result.exit_code == 0
+    assert "TEST=test_value" in result.stdout
+
+
 class TestCircularDependency:
     def test_add_circular_dependency(self, tmp_path):
         initial_content = """