diff --git a/internal/cmd/generate.go b/internal/cmd/generate.go
index 0865705db7..0dd097049d 100644
--- a/internal/cmd/generate.go
+++ b/internal/cmd/generate.go
@@ -348,7 +348,11 @@ func remoteGenerate(ctx context.Context, configPath string, conf *config.Config,
 func parse(ctx context.Context, name, dir string, sql config.SQL, combo config.CombinedSettings, parserOpts opts.Parser, stderr io.Writer) (*compiler.Result, bool) {
 	defer trace.StartRegion(ctx, "parse").End()
 	c, err := compiler.NewCompiler(sql, combo)
-	defer c.Close(ctx)
+	defer func() {
+		if c != nil {
+			c.Close(ctx)
+		}
+	}()
 	if err != nil {
 		fmt.Fprintf(stderr, "error creating compiler: %s\n", err)
 		return nil, true
diff --git a/internal/endtoend/testdata/bad_config/engine/query.sql b/internal/endtoend/testdata/bad_config/engine/query.sql
new file mode 100644
index 0000000000..18b0c0d03c
--- /dev/null
+++ b/internal/endtoend/testdata/bad_config/engine/query.sql
@@ -0,0 +1,2 @@
+-- name: Test :exec
+SELECT 1;
\ No newline at end of file
diff --git a/internal/endtoend/testdata/bad_config/engine/sqlc.yaml b/internal/endtoend/testdata/bad_config/engine/sqlc.yaml
new file mode 100644
index 0000000000..8f20b4eaa5
--- /dev/null
+++ b/internal/endtoend/testdata/bad_config/engine/sqlc.yaml
@@ -0,0 +1,8 @@
+version: 2
+sql:
+- queries: query.sql
+  schema: query.sql
+  engine: "bad_engine"
+  gen:
+    go:
+      out: "db"
\ No newline at end of file
diff --git a/internal/endtoend/testdata/bad_config/engine/stderr.txt b/internal/endtoend/testdata/bad_config/engine/stderr.txt
new file mode 100644
index 0000000000..9797244924
--- /dev/null
+++ b/internal/endtoend/testdata/bad_config/engine/stderr.txt
@@ -0,0 +1 @@
+error creating compiler: unknown engine: bad_engine
\ No newline at end of file