Cellulose nanomaterials obtained from the forest materials has proven itself as one of the miracle material that has spread its feet in wide application areas starting as reinforcement phase for preparing high strength composite materials and now in emerging areas of biomedical field. Cellulose, the basic building block of all trees and plants, is a long chain linear polymer composed of repeating units of anhydrous-β-D-glucopyranose linked together with β-(1→4) glycosidic linkage. The hierarchical microstructure possessed by cellulose molecules allows the extraction of cellulosic nanomaterials with at least one dimension in nanometer range, which are basically termed as “Nanocellulose”. Nanocellulose has been widely categorized as cellulose nanocrystals, which possess rod or sphere like crystal structure, and the more flexible and longer cellulose nanofibres (CNFs). In the present work waste wood scraps has been used to extract CNFs by employing mild chemo-mechanical treatments. The work exclusively deals with the acid free extraction of CNFs with mechanical fibriallation using ultrasonication at a much lower output power. The diameter of obtained fibres as investigated through FESEM analysis lies in the range of 5 to 80 nm and a diameter range of 2-15 nm was obtained through AFM analysis. The CNFs with high aspect ratio were obtained that can act as one of the promising candidate for preparing green nanocomposites and can open up several opportunities in the field of bio-medical. The reinforcing potential of CNFs within the matrix material of SEBS-g-MA was also determined. Results showed the compatibility of CNFs with modified SEBS due to the presence of polar anhydride groups. Nanocomposite films with only 0.005 phr resulted in a drastic increment in tensile strength and modulus value as compared to neat polymer. As CNFs are supplemented with a flexible entangled network structure, high strength nanocomposites film along with a ductile behavior was fabricated.