I think from a safety and smell standpoint, the "no burning" policy is a fine one....but I have 2 ideas:
1. while you seem to be going WAY above and beyond the call of duty/friendship helping this boy out, maybe you could reach a compromise where he could do any burning of herbs in a supervised environment...something like "in the kitchen, while you are there" a few times a week? Of course, this depends upon your reason for the "no burning" rule. If it is safety, then you are there making sure he doesn't burn down the house. if it is because of smell, then this wouldn't be a workable solution
2. I know that many religions require that certain prayers to be said while lighting candles. While this isn't perfect, if he still wants to be able to say those prayers in the "proper way" (while lighting a candle), ask him if he can use one of those electric candles (where there isn't actually a flame, but a lightbulb). I could be wrong about this, but I always thought that candles matched with prayer because of the light that they provide, not because of the striking of a match. If he could "flick a switch" to get that light...would that still allow him to say those prayers "properly"?
Just some thoughts....