The paper towel does give off a bit more smoke yes, it also gives off more light. The commercial tight weave paper towel gives off less smoke than say the home version of Bounty.
Simply put here is the instructions for the veggie tuna can light/heater;
cut top off of the Tuna Can = 90-95% off, drain remove contents, eat them up
rinse or no rinse it is up to you,
fold down the lid into the can creating a ramp upwards
roll the paper towel like some 16 year old rolls a dube, very tight though and with no fillers
soak into the Veggie Oil - Olive Oil is best, extra virgin is the very best
lay mostly in the oil,
the part that sticks up and out will burn
There will be a little smoke at first then it will settle down

Option two;
more light and heat
make Two ends stand up out of the oil, light both ends
this will smoke more, burn more Veggie Oil
you will get more light and more heat

Veggie Oil with Jute
I use a small canning jar
take some non coated wire
make a small spiral opening
then make a base
pull the Jute up and through the spiral opening
make sure the Jute is soaked through, aprox 15-20min or it will not stay lit
make sure the Veggie/Olive Oil is at least 45% full for good burn

This will keep tea warm if used that way
this will give safe light if used that way
cost = Small container of Veggie/Olive Oil $2
jute = WallMart - Dollerama =$2
container free / used
400-800 hrs
Fire = self extinguishing
note= make sure it is natural fibre jute and preferable made in North America, better chance of it being safer then.
Will post pics later, so will take some pics for you.