diff --git a/CHANGES.md b/CHANGES.md
index 7b5489a2..61b1558a 100644
--- a/CHANGES.md
+++ b/CHANGES.md
@@ -6,6 +6,12 @@ creating a new release entry be sure to copy & paste the span tag with the
 updated. Only the first match gets replaced, so it's fine to leave the old
 ones in. -->
 
+## __cylc-rose-1.3.1 (<span actions:bind='release-date'>Upcoming</span>)__
+
+### Fixes
+
+[#248](https://github.com/cylc/cylc-rose/pull/248) - Make sure that rose stem sets variables in `[jinja2:suite.rc]` not `[jinja2]`.
+
 ## __cylc-rose-1.3.0 (<span actions:bind='release-date'>Released 2023-07-21</span>)__
 
 ### Fixes
diff --git a/cylc/rose/stem.py b/cylc/rose/stem.py
index a5c2b494..2d107739 100644
--- a/cylc/rose/stem.py
+++ b/cylc/rose/stem.py
@@ -453,7 +453,7 @@ def process(self):
                 # Get the name of the template section to be used:
                 template_type = get_rose_vars(
                     Path(url) / "rose-stem")["templating_detected"]
-                self.template_section = f'[{template_type}]'
+                self.template_section = f'[{template_type}:suite.rc]'
 
             # Versions of variables with hostname prepended for working copies
             url_host = self._prepend_localhost(url)
diff --git a/tests/unit/test_rose_stem_units.py b/tests/unit/test_rose_stem_units.py
index 3f0d868f..dbf787c1 100644
--- a/tests/unit/test_rose_stem_units.py
+++ b/tests/unit/test_rose_stem_units.py
@@ -22,11 +22,12 @@
 from types import SimpleNamespace
 
 from cylc.rose.stem import (
+    _get_rose_stem_opts,
     ProjectNotFoundException,
     RoseStemVersionException,
     RoseSuiteConfNotFoundException,
     StemRunner,
-    get_source_opt_from_args
+    get_source_opt_from_args,
 )
 
 from metomi.rose.reporter import Reporter
@@ -291,3 +292,31 @@ def test__deduce_mirror():
     }
     project = 'someproject'
     StemRunner._deduce_mirror(source_dict, project)
+
+
+def test_process_template_engine_set_correctly(monkeypatch):
+    """Defines are correctly assigned a [<template language>:suite.rc]
+    section.
+
+    https://github.com/cylc/cylc-rose/issues/246
+    """
+    # Mimic expected result from get_rose_vars method:
+    monkeypatch.setattr(
+        'cylc.rose.stem.get_rose_vars',
+        lambda _: {'templating_detected': 'empy'}
+    )
+    monkeypatch.setattr(
+        'sys.argv',
+        ['foo', 'bar']
+    )
+
+    # We are not interested in these checks, just in the defines
+    # created by the process method.
+    stemrunner = StemRunner(_get_rose_stem_opts()[1])
+    stemrunner._ascertain_project = lambda _: ['', '', '', '', '']
+    stemrunner._this_suite = lambda: '.'
+    stemrunner._check_suite_version = lambda _: '1'
+    stemrunner.process()
+
+    for define in stemrunner.opts.defines:
+        assert define.startswith('[empy:suite.rc]')