diff --git a/Makefile b/Makefile
index 1b1495b..90d2a14 100644
--- a/Makefile
+++ b/Makefile
@@ -16,6 +16,7 @@ install:
 		$(DESTDIR)/usr/bin \
 		$(DESTDIR)/usr/sbin \
 		$(DESTDIR)/usr/lib/flatcar \
+		$(DESTDIR)/usr/lib/sysupdate.d \
 		$(DESTDIR)/usr/lib/systemd/system \
 		$(DESTDIR)/usr/lib/systemd/network \
 		$(DESTDIR)/usr/lib/systemd/system-generators \
@@ -33,6 +34,7 @@ install:
 	install -m 644 configs/modules-load.d/* $(DESTDIR)/usr/lib/modules-load.d/
 	install -m 644 configs/tmpfiles.d/* $(DESTDIR)/usr/lib/tmpfiles.d/
 	cp -a systemd/* $(DESTDIR)/usr/lib/systemd/
+	cp -a sysupdate.d/* $(DESTDIR)/usr/lib/sysupdate.d/
 	chmod 755 $(DESTDIR)/usr/lib/systemd/system-generators/*
 	ln -sf ../run/issue $(DESTDIR)/etc/issue
 	ln -sfT flatcar $(DESTDIR)/usr/lib/coreos
diff --git a/systemd/confext.conf b/systemd/confext.conf
new file mode 100644
index 0000000..af3c8ac
--- /dev/null
+++ b/systemd/confext.conf
@@ -0,0 +1,2 @@
+[ConfExt]
+Mutable=auto
diff --git a/systemd/system/ensure-sysext.service b/systemd/system/ensure-sysext.service
deleted file mode 100644
index e35d7ac..0000000
--- a/systemd/system/ensure-sysext.service
+++ /dev/null
@@ -1,17 +0,0 @@
-[Unit]
-BindsTo=systemd-sysext.service
-After=systemd-sysext.service
-DefaultDependencies=no
-# Keep in sync with systemd-sysext.service
-ConditionDirectoryNotEmpty=|/etc/extensions
-ConditionDirectoryNotEmpty=|/run/extensions
-ConditionDirectoryNotEmpty=|/var/lib/extensions
-ConditionDirectoryNotEmpty=|/usr/local/lib/extensions
-ConditionDirectoryNotEmpty=|/usr/lib/extensions
-[Service]
-Type=oneshot
-RemainAfterExit=yes
-ExecStart=/usr/bin/systemctl daemon-reload
-ExecStart=/usr/bin/systemctl restart --no-block sockets.target timers.target multi-user.target
-[Install]
-WantedBy=sysinit.target
diff --git a/systemd/system/sysinit.target.wants/ensure-sysext.service b/systemd/system/sysinit.target.wants/ensure-sysext.service
deleted file mode 120000
index 8fe8067..0000000
--- a/systemd/system/sysinit.target.wants/ensure-sysext.service
+++ /dev/null
@@ -1 +0,0 @@
-../ensure-sysext.service
\ No newline at end of file
diff --git a/systemd/system/systemd-confext.service.d/prepare-mutable.conf b/systemd/system/systemd-confext.service.d/prepare-mutable.conf
new file mode 100644
index 0000000..4177e1a
--- /dev/null
+++ b/systemd/system/systemd-confext.service.d/prepare-mutable.conf
@@ -0,0 +1,3 @@
+[Service]
+# Users having their own /var partition don't get this set up in the initrd
+ExecStartPre=/bin/bash -c "mkdir -p /var/lib/extensions.mutable/ && if [ ! -L /var/lib/extensions.mutable/etc ] && [ ! -e /var/lib/extensions.mutable/etc ]; then ln -s /etc /var/lib/extensions.mutable/etc; fi"
diff --git a/systemd/system/systemd-sysext.service.d/after-confext.conf b/systemd/system/systemd-sysext.service.d/after-confext.conf
new file mode 100644
index 0000000..c0dea74
--- /dev/null
+++ b/systemd/system/systemd-sysext.service.d/after-confext.conf
@@ -0,0 +1,3 @@
+# Define an order to allow a confext to influence systemd-sysext
+[Unit]
+After=systemd-confext.service
diff --git a/sysupdate.d/noop.transfer b/sysupdate.d/noop.transfer
new file mode 100644
index 0000000..a591a2e
--- /dev/null
+++ b/sysupdate.d/noop.transfer
@@ -0,0 +1,8 @@
+[Source]
+Type=regular-file
+Path=/
+MatchPattern=invalid@v.raw
+[Target]
+Type=regular-file
+Path=/
+MatchPattern=invalid@v.raw