The first version of the E3ME model was built by an international European team under a succession of European Commission research projects, which were completed in 1999.

E3ME was built to meet the expressed need of researchers and policy makers for a quantitative framework to analyse the impacts of Energy-Environment-Economy (E3) policies.

It was designed to address the short- and medium-term economic effects of such policies, as well as long-term effects, such as those from the supply side of the labour market.

In 2001 an update of the E3ME industry output, product and investment classifications brought the model into compliance with the European System of Accounts, ESA 95. This led to a significant disaggregation of the service sector which has been maintained ever since.

In 2003 the E3ME transport module was fully developed to include detailed country models for several modes of passenger and freight transport and in 2033/4 an improvement of the E3ME technology indices was made.

Further projects between 2005 and 2010 allowed the expansion of E3ME to cover 33 European countries, including the twelve EU accession countries and four candidate countries, and added the materials module.