Using Application Passwords with Wordpress Docker

I want to be able to use Application Passwords with my local network Wordpress installation that was using the official Docker image. There doesn't seem to be a huge amount online about how to do this so I thought I would post the solution that worked for me:

As I am not using https (because the service is only exposed internally within my network), I need to set an environment variable called WP_ENVIRONMENT_TYPE within Wordpress to "local". I can do this from my docker compose file using the WORDPRESS_CONFIG_EXTRA variable:

services:
  wordpress:
    image: wordpress
    environment:
      WORDPRESS_DB_HOST: wordpress-db
      WORDPRESS_DB_USER: wordpress
      WORDPRESS_DB_PASSWORD: ${SQL_PASSWORD}
      WORDPRESS_DB_NAME: wordpress
      WORDPRESS_CONFIG_EXTRA: |
        define('WP_ENVIRONMENT_TYPE', 'local');
    volumes:
      - ${DOCKER_APP_DATA}/wordpress/html:/var/www/html

Once this is done, you can navigate to your to the user admin part of wp-admin and edit a user. At the bottom of the page you can now create Application Passwords for that user.