To unlock extreme difficulty you have to beat the game on hard first.

Things to keep in mind:
Enemies have more health do more damage and there are more of them so always watch your back.You will not have a VS suit for most boss battles you have to use the weapons you find in the missions as you go along try to keep an eye out for those rockets they will save your life in boss battle's in extreme.Your T-ENG decreases much faster id say around the speed as if you were in a PTX-40A(super mech, hardballer what ever you like to call it).Don't try to shoot everything in sight. Everything that dies, breaks, explodes drops T-ENG which is your key to survival. But always watch your ammo.The hardest boss is the first boss so save your energy because the game will get easier toward the end. But i will say mission five boss will take its damn time to kill its a tough.