Cotton gin trash (CGT), a lignocellulosic waste generated during cotton fibre processing, has recently received significant attention for production of composite bio-plastics. However, earlier studies were limited to either with biodegradable polymers, through small-scale solution-casting method, or using industrially adaptable extrusion route, but with non-biodegradable polymers. In this study, a scale-up production of completely biodegradable CGT composite plastic film with adjustable biodegradation rate is proposed. First using a twin screw extruder, the prepared CGT powder was combined with polycaprolactone (PCL) to form pellets, and then using the compressing moulding, the pellets were transformed into bio-plastic composite films. Hydrophilic polyethylene glycol (PEG) was used as a plasticiser in the mixture and its impact on the biodegradation rate was analysed. The morphology of CGT bio-plastic composite films showed even distribution of CGT powder within the PCL matrix. The CGT incorporation improved the UV resistance, thermal stability, and Young’s modulus of PCL material. Further, the flexibility and mixing properties of the composites were improved by PEG. Overall, this study demonstrated a sustainable production method of CGT bio-plastic films using the whole CGT and without any waste residue produced, where the degradation of the produced composite films can be adjusted to minimise the environmental impact.