You can name the environment variable whatever you want. The trick is that the variable's value needs to be either none
, ssl
or tls
(i.e. the three options that are supported for the "Encryption Method" setting), for it to be selectable for that setting.
For example, if you add a variable called SMTP_ENCRYPTION_METHOD
to your .env
file, and set its value to ssl
(i.e. SMTP_ENCRYPTION_METHOD=ssl
), that variable will show up as a selectable option for the "Encryption Method" setting:

Note that the "Use authentication" setting has the same behaviour; any and all environment variables with a value set to one of these settings' supported options (yes
, no
, true
, false
, on
, off
, 0
or 1
, for the "Use authentication" setting) will be selectable, regardless of the actual variable name.
Edit: Environment variable support for the Encryption Method setting was only added in Craft 3.7.22, so make sure you're on at least that version.