Can an ultrasonic sensor differentiate b/w objects? Can we potentially use an ultrasonic sensor to differentiate between objects based on the reflective capacity of the object?
For example to differentiate between metals and biodegradable wastes.
No. No, you can't. All they sense is the "time of flight".

The closest you would come would be to have a sensor which can detect physical properties of the target.  That could be colour, sound absorption, etc.  You'd need something that sends out a "broad spectrum" signal (white light, white noise, etc) and detects the reflected spectrum (colour sensor, wide-band microphone) and do spectral analysis of it.  The signal would also have to be fairly tightly focussed to exclude signals from the environment.

All-in-all not something for a little Arduino to consider without lots of extra expensive hardware.