This paper presents the strategy for a large EU-funded Integrated Project: EXIOPOL ('A New Environmental Accounting Framework Using Externality Data and Input-Output Tools for Policy Analysis'), with special attention for its part in environmentally extended (EE) input-output (IO) analysis. The project has three principal objectives:(a) to synthesize and further develop estimates of the external costs of key environmental impacts for Europe; (b) to develop an EE-IO framework for the EU-27 in a global context, including as many of these estimates as possible, to allow for the estimation of environmental impacts (expressed as LCA themes, material requirement indicators, ecological footprints or external costs) of the activities of different economic sectors, final consumption activities and resource consumption; (c) to apply the results of the work to external costs and EE I-O for illustrative policy questions.