Although the importance of bio‐polyethylene is increasing, academic research on the subject is still limited. The dispersion level of pigments and functional additives plays a crucial role in achieving the desired effect from polymer composites. This study investigates the effects of additives and process conditions on pigment dispersion in bio‐polyethylene masterbatches using four different factors and three different parameters by the Taguchi method. To achieve this, the relative colour strengths of extruder‐produced masterbatches were measured using a spectrophotometer, blown film samples were visually observed and filter pressure values were examined in a filter tester. The results were subjected to Taguchi analysis to determine which factors and parameters are important to the process and which can be neglected. The study identified the physical properties of the wax, extruder screw speed, barrel temperature and mixer time as the most effective factors on pigment dispersion, respectively. Micronised wax was found to be the most critical parameter among wax types, while mixer mixing time was found to be the least important. It was observed in all the experiments that the colour strength obtained from a constant pigment content in the masterbatches was improved by increasing the dispersion and reducing the number of agglomerated particles.