Tobacco seems to be one of the best to me, although I have just two indoor pigeons. no experience with lots of pigeons in lofts.
Tobacco smell (according to many) keep mites and other insects away from loft and pigeons.
For indoor pigeons if they do not poop in their nests like mines, tobacco can be reused with success.
Tobacco the first time you use it loose a kind of black dust, nothing to do with the white dust pigeons produce for their feathers but a dust that comes from the tobacco itself, but when you reuse it the dust is gone and can be reused.
The dust does not harm the pigeons but the nest must be cleaned of the dust every round of eggs to avoid acumulation of bacteria.
I have not tried other materials yet, but tobacco works pretty good to me, its a natural stuff, clean, and my pigeons like it.
Of course if your pigeons poop in the nest or you are letting the eggs hatch the story would be different.
My pigeons sit all time on fake eggs.
The video gives a good idea about tobacco and pine N, choose the one that fits your needs, and do research about other options too.
I've heard pine needles work great. I don't know but I'm gonna try them next year. The needles must be at least 8 inches long. I've been using hay. It is ok but what ever you do make sure it does not give dust. The dust could mean mold on the hay. The dust can kill the baby pigeons.
I agree with pine needles, they are quite good, straw can be used although hay would be better. You could give your birds a choice and place a few different things in the loft and then they will use what they like, just ensure that the material on offer is provided in such a way that one smart pair decides to build a nest on top of it all
I've watched my birds raid my chickens nest and steal their straw......I have used pine needles in the past , they seem to like them when they are still green , probably because they can be flexed /molded in their nests.